Carsons Cumberbatch PLC says that the overall forecast for the remaining period of this financial year appears to be negative and a substantial improvement from last year's results is not predicted due to the global financial meltdown and its impact on the macro economic conditions of the regions and markets in which the Group does business.
Group results for the six months ended 30th September 2008 show a revenue of Rs.9.67 billion and a profit after tax of Rs.3.03 billion, 49% and 74% higher, respectively than the comparative period last year. However, when compared to the results published for the first quarter of the current year, the growth in revenue and profit after tax is only 67% and 18%, respectively. The Board of Directors, in a communique to shareholders, said the main reason for the sluggish growth in the second quarter of this year is the spectacular slump in the commodity markets triggered by the turmoil in the global financial markets and the resulting dramatic collapse of crude oil prices. While Brent crude oil prices per barrel dropped from US$138.30 as at 30th June 2008 to US$93.52 as at 30th September 2008, crude palm oil prices also recorded a drop of 34% during this period.
The Directors further stated that in spite of the predictions and cautioning made in the review of the results as at 30th June 2008, the magnitude of the collapse was unexpected. Although the end September price of US$662 per tonne of crude palm oil compares with the levels of US$757.64 in 2007, it is a major drop from the peak levels of US$1057.20 witnessed during the intervening period.
They added the future expansion plans of the plantation sector are being reviewed in light of the revised forecasted earnings as well as possible increase in interest rates by the financial institutions in response to the impact of the crisis prevailing in financial markets.
The beverage sector has posted results below that of the previous year due to cost escalation in inputs and financing which is further impacted by increased levies. Group results were boosted by gains made in the first quarter on the sale of long term investments in Hayleys PLC and Sri Lanka Telecom.
The real estate sector continued to be sustained by the rental properties even though the development business has not been able to make much headway despite aggressive marketing efforts mainly due prevailing negative sentiments. Hotels continue to experience low levels of occupation amidst declining tourist arrivals and rely mostly on domestic tourism and MICE market for revenue. The management sector has achieved noteworthy gains which are derived from the outsourced management of the Group plantations. |
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