Distilleries Co. comes to rescue of Melstacorp in 3Q

Distilleries Company of Sri Lanka PLC continued to buffer Melstacorp PLC’s financial performance during the three months ended December 31, 2020 (3Q21), but the businesses under the diversified category, including tourism-heavy Aitken Spence Holdings PLC, weighed on the group’s financials. 

Melstacorp PLC, one of the most diversified entities in Sri Lanka, reported revenues of Rs.38.8 billion for the quarter under review, compared to Rs.39.8 billion in the same period in 2019. 

Distilleries Company, the country’s leading distiller with over 70 percent market share added Rs.26.2 billion to the group revenue, up by 17.7 percent from the year earlier period. 

Distilleries Company remained mostly resilient even throughout the pandemic, though a brief setback was seen during the height of the virus, which was also caused by the restrictions on mobility as the spirits made by the company held the group largely in tact. 

Melstacorp has other interests in tea and rubber plantations through Madulsima and Balangoda Plantations, telecommunications through its ownership in Lanka Bell, financial services through Continental Insurance.

Aitken Spence is a 50.2 percent owned subsidiary of Melstacorp and the company is into tourism, maritime and logistics, power generation, printing etc. 

The group’s plantations sector did better than in the year earlier period with revenues improving and the operating results turning a profit while telecommunications cut losses and the insurance business did better. 

However, the businesses captured under ‘diversified’ was the biggest drag on the group as its consolidated revenues fell to Rs.21.2 billion in the nine months to December from Rs.39 billion in the same period last year, while recording an operating loss of Rs.5.4 billion from an operating profit of Rs.1.8 billion a year earlier. 

Melstacorp reported earnings of 90 cents a share or Rs.1.1 billion compared to Rs.1.09 a share

or Rs.1.3 billion in the year earlier period. The group re-financed its loans to benefit from lower interest rates.  
Melstacorp share ended higher at Rs.60 on Friday, up Rs.6.70 or 12.57 percent. 

Business tycoon Harry Jayawardena controls 57.229 of Melstacorp in concert with other entities he owns.