Local production can meet basic needs: Cargills
View(s):Cargills (Ceylon) PLC, announcing its consolidated financial results for the six months ended 30th September 2022, has said that local production can meet the basic needs of Sri Lanka.
“We believe that local production can meet the basic food needs of Sri Lanka in the long-term with the appropriate policies to encourage investment in food production,” the company said this week.
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.
It recorded a cumulative revenue of Rs. 97,181 million (66 per cent YoY) for the 1st half of the year while revenue increased to Rs. 49,206 million (70 per cent YoY) during the quarter under review. Group EBITDA for the 1st half of the year was Rs. 9,410 million (65 per cent YoY) and Rs. 4,969 million (74 per cent YoY) for the quarter under review.
The group recorded an operating profit of Rs. 6,527 million (102 per cent YoY) during the first half of the year while operating profits grew to Rs. 3,521 million (116 per cent YoY) during the quarter under review. Profit after tax was Rs. 2,737 million (127 per cent YoY) for the first half of the year and reached Rs. 1,186 million (69 per cent 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,” the statement said.
Though price increases impacted volume growth during the first few months of the year, the group was 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.
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.
“At a time when customers have been burdened with significant price increases, we have curtailed passing of costs to the consumer. Selective price revisions have been made to minimise the impact to profitability, with careful consideration on affordability and nutrition,” it said.
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