Cargills Group records Rs. 2.74 Bn PAT in 1H
Cargills (Ceylon) PLC announced its consolidated financial results for the six months ended September 30, 2022. The Group was able to deliver a steady performance in a challenging environment, particularly considering rising interest and raw material cost as well as increasing cost of operations.
The Group recorded a cumulative revenue of Rs 97,181 million (66% YoY) for the 1st half of the year while revenue increased to Rs. 49,206 million (70% YoY) during the quarter under review. Group EBITDA for the 1st half of the year was Rs. 9,410 million (65% YoY) and Rs. 4,969 million (74% YoY) for the quarter under review. The Group recorded an operating profit of Rs. 6,527 million (102% YoY) during the 1 st half of the year while operating profits grew to Rs. 3,521 million (116% YoY) during the quarter under review. Profit after tax was Rs. 2,737 million (127% YoY) for the 1st half of the year and reached Rs. 1,186 Mn (69% YoY) for the quarter under review.
The Group’s performance was driven by all three major business segments of the Group – Retail, Food Manufacturing, Restaurants. In the Retail sector, higher revenue and transactions were driven by offering availability in addition to the best prices and quality, which enabled the company to expand its market position. We see encouraging same-store sales growth as the sector is poised to achieve its highest recorded sales in its 39-year history over the coming months. Though price increases impacted volume growth during the first few months of the year, we have been able to curtail price increases below the national food inflation, which has reduced the impact to customers and supported a pickup in volumes of certain essential food categories. Cargills Retail added 19 new stores during the first half of the year under review, with the landmark 500th Cargills Retail store being opened in October.
The food manufacturing business recorded another strong quarter, despite challenges with raw material availability, fuel shortages, rising input costs, and rising cost of factory operations. All categories recorded strong volume growth except the confectionery business where the price component led sales growth. We have seen an increase in demand for our brands, although supply challenges have limited the ability to meet customer demand from time to time. Our team is currently working on building local production in order to ensure the Group continues to serve the nutritional needs of our customers.
The Group declared an interim dividend of Rs. 3.50 per share for the reporting period, which is higher than the Rs. 2 per share declared during the previous financial year.