CIC cuts losses during June quarter

CIC Holdings PLC (CIC) slashed losses during the quarter ended June 30, 2018 (1Q19) as the diversified conglomerate known for its crop and industrial solutions is recalibrating its different businesses, as the group is undergoing a re-strategizing exercise spanning through 2020. 

The group reported a loss per share or 24 cents or a net loss of Rs.22.87 million for the April – June period compared to a loss per share of 92 cents a share or Rs.87.08 net loss reported for the same period, last year. 

The group realized a section of its financial assets held under available-for-sale category, which resulted in a net loss of Rs.73.40 million, causing the bottom line to turn red for the quarter. 

Meanwhile, CIC earned revenues of Rs.6.7 billion, down 12 year-on-year (YoY), as revenues from four out of five business segments of the group faltered. 
The only exception was the health and personal care business which owns the household brand ‘Link Natural’. 

CIC Holdings aims market leadership in the healthcare sector. 

During the quarter under review, this business generated revenues of Rs.1.95 billion, up from Rs.1.93 billion a year ago.

The operating profit was Rs.180 million, slightly down from Rs.187 million in the same period, last year. 

As part of the re-strategizing exercise, which began in 2015, CIC Holdings reorganized its key business segments under five main business pillars—crop solutions, healthcare, industrial solutions, livestock and agri produce. 

During the process, consumer and export of industrial chemicals were discontinued to release capital. Meanwhile, crop solutions – CIC’s largest business segment – reported revenues of Rs.2.1 billion for 1Q19, compared to Rs.2.4 billion reported for the same period, last year.

The operating profit rose sharply to Rs.242 million from Rs.76 million a year ago. 

Crop solutions consist of fertilizer, seeds, plant nutrition and protection solutions.  CIC was once the biggest supplier of fertilizer to the Sri Lanka’s paddy cultivating community under the government-sponsored subsidy scheme.  The agri produce business generated a loss of Rs.58 million on revenue of Rs.530 million, down from Rs.885 million a year ago. 

Agri produce segment encompasses dairy, farms, fruit and vegetables, grains and rice and many more.  During the financial year ended in March 31, 2018, this business segment was badly hurt by adverse weather conditions prevailed during the most parts of the year. 

Despite that, CIC has come up with some organically-grown agri produce varieties to cater to the growing consumer demand for healthy foods.  Meanwhile, the group’s livestock solutions business generated a profit of Rs.36 million on revenue of Rs.1.4 billion, both down from Rs.112 million and Rs.1.7 billion a year ago.  The industrial solutions segment generated a profit of Rs.63 million on revenue of Rs.865 million down from Rs.94 in million profits and Rs.1.1 billion in revenues.
Paints & General Industries Limited controlled by the Captain family held 53.31 percent stake in CIC Holdings as at June 30, 2018, and Employees’ Provident Fund also held a 9.06 percent stake being the second largest shareholder.