Ceylon Cold Stores 3Q rebounds on strong sales; share gains 24% on strong earnings 

Ceylon Cold Stores PLC turned around its performance in the quarter ended in December after a brief sales decline in the previous quarter which swung the company into a loss as the ending of lockdowns and the brisk pace of the demand helped the company to record higher top-line in the final three months of the year.  

 Sri Lanka’s largest listed food and beverage company reported revenues of Rs.22.89 billion in the October - December period, up 21 percent from the same period last year while its operating profit rose by 41 percent to Rs.1.51 billion as the company was seen defending its margins as the costs were managed quite efficiently. 
 The company’s share added Rs.127.75 or 24.30 percent yesterday to close at Rs.649.00. 

 The producer and the distributor of Elephant House branded range of processed foods and fizzy drinks made the most of the strong demand conditions prevailed throughout the quarter which may have been further supported by the year end festive demand after the gradual lifting of remaining restrictions on the economic activities starting from October. 

 The company’s sales fell to Rs.17.7 billion and turned into a loss of Rs.77.1 million in the previous quarter ended in September after a swath of the economy was shuttered for nearly half of that quarter due to the virus resurgence. 

 While there is an element of seasonality in the December quarter sales, the performance in the most recent quarter is an indication that people are ready to spend on the company’s products regardless of the prices which rose by over 12.0 percent in the year through December. 

 This is reflective from the group’s manufacturing business which reported revenues of Rs.4.64 billion and profits of Rs.458.88 million in the quarter, recording growths of 48.7 percent and 102.7 percent respectively from the same period in 2020.   The company during the quarter paid nearly Rs.150 million to acquire a water bottling plant. The company first disclosed of the deal in October as it was seeking to increase efficiency and reduce the cost of the current operation, the company said then.   Meanwhile the group’s retail arm which operates around 130 supermarkets reported revenues of Rs.18.42 billion, up 15.1 percent and a profit of Rs.357.12 million, up 23.5 percent.   At a consolidated level, the company reported earnings of Rs.8.58 a share or Rs.815.48 million in the December quarter compared to Rs.5.35 a share or Rs.508.17 million in the year ealier period. This translated into a robust 60 percent increase. 

Meanwhile, for the nine month through December the company reported earnings of Rs.8.94 a share or Rs.849.64 million, down 13 percent on revenues of Rs.58.78 billion which was up 18 percent over the same period in 2020.
 John Keells Holdings had 70.66 percent stake in Ceylon Cold Stores while Whittall Boustead (Pvt) Limited had 10.7 percent stake being its second largest shareholder as of December 31, 2021.