Ambeon Holdings reports subdued 3Q

Weak economic conditions undermined the performance at Ambeon Holdings PLC during the quarter ended December 31, 2019, resulting in a mixed performance of its diverse business interests. 

The mid-sized diversified conglomerate recorded revenues of Rs.5.1 billion for the three months to December (3Q20), down from Rs.5.4 billion a year ago. 

The profits at the operating level of the group fell sharply to Rs.195.1 million, from Rs.576.9 million a year ago, as a result of a substantial increase in administrative expenses, from Rs.487.9 million to Rs.791 million during the quarter under review. 

“It was a challenging first nine months due to the impact of 4/21 compounded macro issues, which led to negative impact in investments and related decisions, both in the short and long terms. 

In addition to this, the rise in the cost of doing business in general posed further challenges for organisations,” Ambeon Holidings Group Managing Director/CEO Murali Prakash said in a press release.

Ambeon Holdings has interests in manufacturing of footwear, porcelain and textiles, IT and related services, financial services, investments and real estate.

Former Lanka Century Investments PLC was rebranded as Ambeon Holdings in 2018 as part of a group resetting exercise.

The company in 2017 December entered into the IT and related services sector through the acquisition of Millennium Information Technology (Millennium IT ESP) from London Stock Exchange Group, for Rs.1.08 billion. 

“FY 2018/19 was all about embracing change as we experienced extensive restructuring initiatives. This year, it is about continuing to bring about that collective focus, optimising investments and thereby increasing shareholder value,” Prakash said. 

Ambeon, the makers of Dankotuwa Porcelain, Royal Fernwood Porcelain and DI leather shoes, reported earnings of 40 cents a share or Rs.142.3 million in total earnings for the quarter under review, compared to the earnings of 85 cents a share or Rs.302.1 million in the corresponding period of 2018. 

Meanwhile, for the nine months ended December 31, 2019, the group reported earnings of 41 cents a share or Rs.147.1 million, compared to a loss of Rs.139.3 million in the corresponding period a year ago. 

The group revenues were Rs.15.9 billion, up 19 percent from a year ago. 

The group’s textile manufacturing business cluster, the largest segment by revenue, recorded a top line of Rs.7.4 billion, compared to Rs.6.6 billion in the corresponding period a year ago. 
The operating profit of this business however fell sharply to Rs.271.5 million, from Rs.453.5 million.

Ambeon’s South Asia Textiles Limited manufactures weft knitted fabric while it also does dyeing, finishing, printing, brushing, sueding and preshrunk fabric for leading global brands such as Victoria’s Secret, Next, Marks & Spencer, Tesco, Calvin Klein, Decathlon and Adidas. 

Meanwhile, Millennium IT ESP, the second largest segment by revenue, recorded a revenue of Rs.6.2 billion, up from Rs.4.8 billion a year ago and the operating profits of the business cluster rose to Rs.530.3 million, from Rs.511.3 million.

Ambeon Capital PLC owns an 81.43 percent stake in Ambeon Holdings and Ambeon Capital is a company controlled by Galle Face Hotel Group, Hirdaramani Group 
and Navitas Holdings. 

CHC Investment (Pvt.) Limited, an investment vehicle owned by the trio, owns a 56.68 percent stake in Ambeon Capital PLC while ARRC Capital (Pvt.) Limited, an investment vehicle owned by the high-net-worth investor Ajith Devasurendra, holds another 40.57 percent stake in the group.