Sri Lanka’s Keells Foods net grows 34-pct in June, revenues up

Sri Lanka’s Keells Food Products said profits grew 34 percent from a year earlier to 56.3 million rupees in the June 2018 quarter on expanding sales of processed meats to households.

Keells Food reported earnings of 2.21 rupees a share in the quarter,  interim results filed with the Colombo Stock Exchange showed.

The share last traded at 130.50 rupees.

In the June quarter revenues grew 10 percent from a year earlier to 801 million rupees and cost of sales grew at a slower 8 percent to 574.5 million rupees which saw gross profits increase by 15 percent to 226.5 million rupees.

A recovery was seen from the March quarter when revenues grew 8 percent, when full year growth to end March was only 02 percent to 3.1 billion rupees and profits fell 11 percent to 244 million rupees, accounts showed.

The company makes bulk sales to restaurants and hotels and also sells to households through supermarkets and retails shops, where household sales grew faster last year, Chairman Susanthe Ratnayake said.

Keells Foods had started to cater to evolving lifestyles by offering ready-to-eat products which were more convenient.

“Evolving consumer lifestyles have led to growing demand for convenience and nutrition, with consumer demand evident for single serve, easy-to-prepare and easy to take-away products that offer nutrition and value-for-money,” Ratnayake said in the annual report.

“In anticipation of these growing trends, the company launched its first ready-to-eat range of products with a focus on value-for-money convenience meal offering.”

More products catering to health conscious consumers are in the pipeline.

“The expansion of its portfolio towards the lifestyle trends of convenience foods and a more health conscious consumer, capitalising on the growing need for main meal opportunities, remains a near term priority,” Ratnayake said.

“A pipeline of products are currently under development and will be launched based on further validation of customer and marketing insights.”

In the June 2018 quarter, finance costs fell 64 percent from a year earlier to 918,000 rupees in the June quarter, down from 2.58 million rupees a year earlier. Finance income fell 9 percent to 5 million rupees during the period.

Interest bearing borrowings fell 37.6 percent from the previous quarter to 20.9 million rupees.

Selling and distribution expenses grew 18 percent to 87.5 million rupees while administration expenses fell 4 percent to 41.2 million rupees.

Other operating expenses fell 2 percent to 21.7 million rupees.

The company has over 180 processed meat products under the Keells, Krest and Elephant House brands distributed over 21 thousand outlets island-wide.