CIC Holdings delivers robust 2Q performance on defensive business portfolio

• Fertiliser and livestock divisions see soaring revenues and profits 

CIC Holdings PLC reported some solid top and bottom line performances for the three months ended on September 30, 2022 (2Q23), as the group successfully navigated the challenges in the economy coming from runaway inflation and soaring interest rates.

The group, which has interests in agri-produce, livestock solutions, health and personal care, industrial solutions and crop solutions, reported revenues of Rs.17.83 billion for the July-September quarter, up by a robust 87 percent from the same period last year. 

The defensive nature of the group’s multiple businesses and higher prices across their supply chains helped CIC Holdings to defy much of the macroeconomic challenges coming from the economic crisis. 

While the costs were seen rising across the board, the group managed to contain the rise in cost below the rise in its top line. The direct costs rose by 57 percent to Rs.10.9 billion, giving a 167 percent boost to its gross profit. 
At operating level, the group reported profits of Rs.5.05 billion, up 248 percent over the same period in 2021. 

The group also saw its net finance cost tripling to Rs.935.7 million in the quarter, from Rs.311 million a year ago. 
The group reported earnings of Rs.6.18 a share on a total quarterly profit of Rs.2.34 billion, compared to earnings of Rs.1.98 a share or Rs.751.4 million a year ago, up 212 percent.  

For the six months to September, the group reported earnings of Rs.11.77 a share or Rs.4.46 billion, compared to earnings of Rs.3.92 a share or Rs.1.49 billion in the corresponding period in 2021. 

In the six months, the group’s crop solutions business, which has the fertiliser importation and processing unit, doubled the revenues to Rs.10.78 billion, from Rs.5.26 billion in the year ago period. 

This could be attributable to the heightened state focus on farming and agriculture to prevent a food shortage, both as a result of the poorly executed organic fertiliser pivot last year and shortage of foreign currency to import food to make up for any gap in the domestic market. 

 The same conclusions could be drawn into the group’s livestock division, which nearly doubled its revenues to Rs.9.92 billion, from Rs.5.43 billion a year ago, as there was a heavy demand for poultry feed.

On August 31, CIC Holdings acquired a 100 percent stake in Asiavet Lifesence (Pvt.) Ltd, a veterinary products importer, of which the first tranche of the payment consideration of Rs.148.3 million less Rs.30.3 million was paid out of a three-tranche transaction, which will only conclude in 2024. 

The group’s health and personal care business generated revenues of Rs.5.59 billion, compared to Rs.4.39 billion. 
Captain family-owned Paints & General Industries Ltd owns 53.31 percent in CIC while the Employees’ Provident Fund (EPF) has a 9.06 percent stake in the company’s voting shares, being its second largest shareholder.

The EPF also has another 12.7 percent stake in the non-voting shares of the company, leading the shareholder list.  

Meanwhile, during the quarter, Norges Bank entered the top 20 shareholder list of CIC Holdings, with a 0.40 percent stake.