Returns to Profit for the first time after FY 2014/15
Group Revenue increase by 14% from 15.4B to 17.6B
Company Revenue for FY 2020/ 21 a whopping 3.4B recording a growth of 18%
Q 4 Performance exceeds expectations
Lankem Ceylon PLC posted a strong Q4 performance for the FY 2020/21 recording a Pre-Tax Profit of Rs.229Mn against a Loss of Rs.185Mn as reported in 2019-20. The company achieved a quarterly revenue of Rs.1Bn recording a growth of 78% in comparison to the same period as last year.
These results were achieved amidst the Covid -19 pandemic which disrupted markets, including global supply chains. These resulted in organizations having to change their strategies putting a huge strain on operating models. Despite these challenges, the Company was able to change their strategies accordingly ensuring the right product mix was available at the right time to meet seasonal demand. As a result, Paint and the Crop Protection divisions of the Company were able to meet and deliver exceptional performance in meeting seasonal demand for the Avurudhu Maha and Yala season resulting in the Company achieving a Gross Profit of Rs.260Mn for the quarter versus Rs.138Mn the previous year.
“The company closed the financial year on a high, achieving a revenue of Rs.3.4Bn in comparison to Rs.2.9Bn achieved in the previous year, recording a growth of 18%. Commented Mr Suren Goonawardene, Managing Director, Lankem Ceylon PLC. “The Gross profit of Rs.827Mn is an increase by 46% compared to 2019/20. The improvement in margin is a result of optimizing the sales mix in addition to the stringent cost management initiatives that were implemented by restructuring the operation at our manufacturing plants. This has resulted in a drastic reduction of operational losses while the ongoing business restructuring has greatly supported company performance. In challenging times It was imperative that the operation be able to have an agile structure to be able to not just survive but compete. This resulted in the EBIT of the company closing at Rs.521Mn against Rs.66Mn reported in 2019-20”.
The reduction of interest rates has immensely contributed towards improved liquidity, mainly due to the accommodative monetary policy introduced by the Central Bank of Sri Lanka to support the revival of economic activity. The savings by way of interest cost of Rs.106Mn for the year is a mere 18% reduction compared to the previous financial year. Furthermore, the debt moratorium extended to the private sector by the government/Central Bank enabled the corporate sector to sustain cash flows in an extremely challenging year.
Mr. Goonawardene further stated that “For the first time after FY 2014/15 the company has reported a Profit Before Tax of 36Mn signaling a positive momentum for the future of the company. this turnaround of performance is primarily attributable to the dedicated team members of the company who relentlessly performed amidst tough market conditions. The standard of expectation from every individual member has been set at a very high level, and its positive to note that each member across all departments raised to the occasion to contribute in their own domain to achieve overall goals set by the Company” Goonewardene concluded.
Lankem Ceylon as a Group which comprises of hospitality, packaging and distribution clusters posted a revenue of Rs.17.6Bn recording a growth of 14% against the previous FY with better than expected results reported from the distribution sector. In addition, SunAgro Lifescience Limited, a fully owned subsidiary of Lankem which also specializes into high end products used in Crop Protection market has reported tremendous performance contributing Rs 92Mn to the bottom line of the group.
Founded in 1964 as Shell Chemical Company of Ceylon Limited, Lankem Ceylon PLC is a well-diversified conglomerate reputed for its market dominance in the areas of providing Agriculture solutions, Paint manufacturer, Industrial Chemical and Pest Control. Initially formed as a crop protection company, it has grown its core operations to include Coatings and Industrial Chemicals. The Company also has invested in the packaging industry through J.F Packaging Limited, in the FMCG space through its investment in C.W. Mackie PLC and in leisure through its investments in Colombo Fort Hotels.
The Board of Directors of Lankem Ceylon comprises of S.D.R Arudpragasam (Chairman), A. Hettiarachchy (Deputy chairman), A. Rajaratnam, Suren Goonewardene (Managing Director), A.C.S Jayaranjan, R Seevaratnam, P.M.A Sirimanne, G.K.B Dasanayaka , Dr A Mubarak
The above numbers are unaudited and subject to audit.