Cargills (Ceylon) proves resilience with robust growth in crisis FY20

Friday, 3 July 2020 00:03 - - {{hitsCtrl.values.hits}}

Impressive 4Q powers full year result
FY20 Group revenue up 13% to Rs. 107 b
Operating profit up 51% to top Rs. 7 b; after tax profit up 36% to Rs. 2.76 b
4Q Group revenue up 20% to surpass Rs. 28 b; after tax profit soars 135% to cross Rs. 1 b mark

Cargills (Ceylon) PLC has proved its resilience and its investments are in the right sectors by achieving robust growth in the crises-riddled 2019/20 financial year. As per the interim results released yesterday, the Group’s revenue was up by 13% to Rs. 107 billion, for the year ended on 31 March.

Cargills (Ceylon) Deputy Chairman/CEO Ranjit Page

The Group’s operating profit grew by a robust 51% to Rs. 7.06 billion, whilst profit after tax was higher by 36% to Rs. 2.76 billion. Full year result was supported by an excellent fourth quarter with the Group revenue up by 20% to Rs. 28.1 billion, operating profit up 104% to Rs. 2.1 billion, and pre-tax profit up 82% to Rs. 1.4 billion. After tax profit jumped by 135% to cross the Rs. 1 billion mark.

In FY20 Retail revenue grew by 13.13% to Rs. 83.7 billion and operating profit by 97.6%, to Rs. 2.93 billion. Cargills (Ceylon) said with the Retail footprint broadening to 411 outlets at the close of March, rising footfall due to the gradual growth in consumer confidence enabled the Retail sector to show same store sales growth during the year. It also said robust growth was achieved in the Fast Moving Consumer Goods (FMCG) segment which was primarily driven by the Dairy sector performance.

Recording a top-line of Rs. 19.2 billion, up by 14.26%, the sectoral operating profit was recorded at Rs. 3.34 billion, up by 27% from FY19. “Rising consumer demand for our locally sourced and produced goods throughout the year, along with expansion in the Cheese and Butter categories gave way to Dairy being the strongest performer in the FMCG segment.”

“This sustained surge of the FMCG segment enables the Group to further grow the categories through innovation,” Cargills (Ceylon) said. The Restaurant sector performance remained subdued during this period with revenue growing at 7.2% to Rs. 4.15 billion, and operating profit up by 15% to Rs. 367 million. Overall consumption has been favourable, enabling KFC to maintain its position as the most popular QSR chain in the country, with 40 outlets in operation. Commenting on the future outlook, Cargills (Ceylon) said despite the challenging external environment, the Group has been able to maintain its position while ensuring its obligation to its stakeholders.

“The first quarter of the ongoing financial year bore the brunt of the impact from COVID-19, but steps have been taken to recover from this position. The steps taken in response to the pandemic, focused on providing goods and services to the public as far as possible in a safe environment while also ensuring the safety and welfare of the staff,” it said.

“Post COVID-19, the Group remains optimistic towards the future and sees great opportunities to further consolidate and grow the brand “Cargills” in the hearts and minds of the people,” the Company added.

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