Distilleries Corporation of Sri Lanka net up 95-pct in Sept quarter

ECONOMYNEXT – Profits at Distilleries Corporation of Sri Lanka, the island’s largest hard alcohol maker said grew 95 per cent from a year earlier to 2.6 billion rupees, as revenues recovered from Coronavirus lockdowns in the June quarter and gross margins widened, interim accounts showed.

Distilleries reported earnings of 57 cents per share for the quarter. In the six months to September, the firm reported earnings of 78 cents on total profits of 3 billion rupees up from 2.7 billion rupees from the previous year. Distilleries closed 20 cents down to close at 18.50 rupees on Friday.

Revenues with taxes grew 25 per cent to 25.5 billion rupees in the September quarter. Net revenues after turnover taxes grew 30.3 per cent to 9.3 billion rupees, cost of sales was a marginal 0.8 per cent to 4.6 billion rupees, allowing the firm to sharply grow gross profits by 86 per cent to 4.78 billion rupees. Margin can vary based on the local availability of raw materials, analysts say. Operating income has grown a staggering 127 per cent or 59 million rupees while profit from operations gaining 97 per cent to 4.4 billion rupees from 2.2 billion rupees last year. (this 59 million rupees is not material against a 25 billion rupees. It is like one rupee coins falling under your chair???) Finance costs were down to 10 million rupees from 32 million. Sri Lanka returned to normalcy after killing a wave of infections from Western and Asian nations from March 2020 through a tight lockdown but a new outbreak flared in late September. Authorities have since locked down Gampaha and parts of the capital Colombo. (Colombo/Nov13/2020)


Distilleries’ spirits give fillip to Melstacorp’s 2Q

Robust sales recovery at Distilleries Company of Sri Lanka PLC (DCSL) gave the needed fillip to its parent, Melstacorp PLC, while the aggressive cost cutting elsewhere in the group lifted its performance in the three months ended in September (2Q21).  Melstacorp reported Rs.37.3 billion in sales during the July-September quarter, little changed from the comparable period last year but the 26 percent spike in sales at Distilleries Company cushioned the group top line. DCSL, Sri Lanka’s largest distiller with more than 70 percent market share, reported revenues of Rs.25.5 billion in the three months, compared to Rs.20.3 billion in the same period last year.

DCSL earnings nearly doubled to Rs.2.6 billion or 57 cents a share in the July-September quarter, compared to Rs.1.3 billion or 29 cents a share in the same period last year. Fitch Ratings recently said the government was unlikely to snap taxes on the alcoholic beverages at today’s budget because prohibitive increases could hamper demand and the tax income from it. DCSL accounts for 70 percent of Melstacorp’s earnings before interest, tax, depreciation, amortisation and taxes. Melstacorp has business interests in plantation, telecom, leisure, power and logistics segments.

The company reported an operating profit – a closer measure to EBITDA – of Rs.3.9 billion, up 45 percent from the same period last year. The higher operating profit was possible, mainly due to over a billion-rupee decrease in the administrative expenses and another Rs.300 million decline in the sales and distribution expenses. The company reported earnings of Rs.1.57 a share or Rs.1.8 billion for the three months, compared to 54 cents a share or Rs.623.9 million in the comparable period last year. The segmental results available for the six months showed the stronger rebound in plantation business and financial services and to a lesser degree at its telecommunication business. All other businesses, including an outsize power generation business of the group categorised into the ‘diversified’ segment, plunged into a Rs.4.5 billion operating loss, from a profit of Rs.604.9 million a year ago.

Business tycoon Harry Jayawardena controls 57.229 of Melstacorp together with the entities he owns.