Kotmale Holdings PLC ended its 2009/10 financial year with Rs.85.5 million in profits before tax, largely derived from growth in its liquid milk based products segment.
According to a press release, Kotmale Holdings said this is a 13.3% increase in pre-ax profit from the corresponding period last year, highlighting that it was achieved in the face of a strategic, albeit transitory, withdrawal from the powdered milk business due to unfavourable market conditions.
This resulted in consolidated turnover remaining flat at Rs.1,349.7 million.
Commenting on the setback faced in the powdered milk business which once represented a third of the company’s turnover, Kotmale Holdings Director and CEO Jude Fernando said rising world market prices for powdered milk, at a time when domestic retail prices were capped and increased import duties, had compelled the company to curtail import and sales until conditions were more favourable.
The company said a strong focus on cash management had also helped to reduce finance costs by as much as 65% in the year under review, generating a positive impact on the company’s bottom line.
“We are encouraged with the growth achieved in what was a challenging year for most businesses,” Mr. Fernando said.
Mr. Fernando added that the liquid milk based product segment recorded an impressive performance improving turnover by 28% and achieved a net profit growth of 119%.
He said the Group planned to invest substantially to develop the liquid milk products segment and to augment its retail presence across the island in the year ahead.
Kotmale Holdings paid an interim dividend of Rs. 2/- per share in November 2009, and has proposed a final dividend of Rs. 2/- per share in respect of the year under review.