CIC Holdings ups 1Q after tax profit by 94% to Rs. 396 m

CIC Holdings PLC recorded an impressive group profit after tax (PAT) of Rs. 395.9 million for the first quarter of the financial year ending 2015/16. In Q1, profits increased by 94% from Rs. 204.4 million recorded in the corresponding period of the previous financial year. 

The Group also recorded revenue of Rs. 6.51 billion, an increase of 15.6 % over the first quarter of the previous financial year. In Q1, profits attributable to equity holders, was Rs.306.8 million and reflected an increase of 97% over the Rs.155.9 million earned in the previous year. 

CIC also reduced expenses in Q1 and the group’s finance cost reduced due to the maximization of savings and the efficient utilization of borrowed funds. The company profit after tax (PAT) was recorded at Rs. 90.8 million, an increase of 4.2% over the Rs. 87.1 million achieved in the previous financial year. 

The dividend income included under other income was Rs. 14.8 million lower than the previous year, largely due to time delays. Additionally sectors in the group such as Agriculture and Livestock, Industrial Raw Materials, Packaging Industry and Consumer and Pharmaceuticals, delivered improved performances, strengthening the group’s overall profitability. 

Commenting on CIC’s performance, Harsha Amarasekera, Chairman of CIC Holdings PLC, stated: “In the first quarter of 2015/16, CIC has continued its momentum of growth, and several sectors have performed above last year. I would like to commend the senior management and Board of Directors, for effectively implementing our revised strategy, and ensuring the group’s continued profitability. As we look ahead to the future, we shall focus on exploring new partnerships and export opportunities, and we will also seek to implement the use of new technology to take the group forward. The Board of Directors and senior management will also continue to focus on ensuring that all sectors meet their budgets whilst exploring new areas of investment and growth.”

The Agriculture and Livestock sector achieved an operating result of Rs.473 million in the first quarter of 2015/16, an increase of 54% over the first quarter of the previous financial year. The increase in profitability is attributed to the performance of the Agribusiness companies in the group, including the Dairy sector and CIC Feeds, which showed a notable improvement from the previous year.  The Industrial Raw Material sector had an operating result of Rs. 35 million in the first quarter of 2015/16, a marginal increase of 6% over the first quarter of the previous financial year. 

The Packaging Industry recorded an operating result of Rs. 71 million in the first quarter of 2015/16, an increase of 42% over the first quarter of the previous financial year. Additionally, the Consumer & Pharmaceutical sector had an operating result of Rs.107 million in the period under review, a 5% increase over the first quarter of the previous financial year. The increase in profitability is attributed primarily to the performance of Link Natural Products and the high sales of CIC’s western pharmaceutical products. The company has also signed a manufacturing agreement with the Government of Sri Lanka. 

The fertiliser subsidy receivable at the end of June 2015 was Rs. 3.23 billion in comparison to Rs. 3.55 billion at the end of June 2014. The overdue portion of the subsidy as at the end of June 2015 was Rs. 2 billion in comparison to Rs. 2.23 billion last year. The rigorous actions required to recover overdue payments continues to be a concern, and the Board has urged all sectors to constantly review outstanding dues on a regular basis. 

Going forward, the Board and Senior Management will focus on ensuring that all sectors of the business meet budgets while exploring new areas of investment and growth.  At this point of time, in order to maximize returns to our shareholders, the Board is considering significant investments in the areas of dairy and value added vegetables for export, and feasibility studies are on-going. In addition, in the area of local agriculture, the Company has just commenced a project aimed at supplying corn to the local feed industry with a capital expenditure of approximately Rs. 700 million and a projected equity pay back of approximately six years.

CIC is also currently upgrading its binder business with new technology to help the company successfully face the market challenges of the future. The company will continue to look at other avenues for investment provided its returns cross the hurdle rates set by the Board.

CIC has been a leading blue chip conglomerate in Sri Lanka for decades and its business portfolio extends into the areas of agriculture, animal feed, nutrition, healthcare, industrial materials and consumer products.