Keells Food Products sees recovery in sales in 2Q

Keells Food Products PLC (KFP) reported higher revenues and profits for the three months ended September (2Q21) with consumption in the economy recovering after a two-month lockdown, which ended mid-May.

KFP, the leader in processed meat market in Sri Lanka, recorded revenues of Rs.959.7 million for the quarter under review, which is 6 percent higher from a year ago and from Rs.679 million three months ago (1Q21). 

The top-line performance was noteworthy given the still weak demand stemming from Hotel, Restaurants and Cafes (HORECA) segment, which accounts for a larger share. The other two sales channels are the modern trade, comprising of supermarket chains and the general trade comprising of 
small groceries. 

In a bid to penetrate into the general trade sector more effectively, where there is heavy price competition, the company last year expanded its wallet-friendly budget range with the launch of 100g sausage pack at a price of Rs.100.

KFP, who is the producer of Krest and Elephant House branded processed meat products, recorded revenues of Rs.887.5 million under its manufacturing segment for the quarter, compared to Rs.835.9 million in the comparable period in 2019. 

The trading division meanwhile recorded revenues of Rs.72.3 million compared to Rs.65.8 million. 

The company reported earnings of Rs.3.01 a share or Rs.76.9 million for the quarter under review compared to earnings of Rs.2.42 a share or Rs.61.8 million reported in the comparable period in 2019. 

The company ramped up spending on selling and distribution by about Rs.20 million to a total of Rs.120 million during the three months, aimed at pushing its top line up after sales were temporarily undermined during the previous quarter. 

During lockdowns KFP explored opportunities online through its own and third party e-commerce platforms to deliver its products. 

During the six months ended in September, the company cut its capital expenditure to just Rs.48.7 million compared to the year earlier period level of Rs.260.7 million. John Keells Holdings PLC along with John Keells PLC holds nearly 90 percent of KFP.