Melstacorp returns to pre-pandemic performance in March 2021

• Distilleries Company sales surge 40% 

Melstacorp PLC reported solid top and bottom line performance for the three months ended March 2021 (4Q21) reaching pre-pandemic levels, led by Distilleries Company of Sri Lanka PLC (DCSL). 

The diversified group reported revenues of Rs.43.5 billion for the three months to March 2021, its fourth fiscal quarter, up 9.0 percent from the same period in 2020, as weak tourism revenues coming from its subsidiary Aitken Spence blunted a what could have been a solid top line performance.   

Distilleries Company continued to remain the largest contributor to the revenues and profits of the group as the country’s largest distiller generated revenues of Rs.26.6 billion, recording a robust 39.6 percent increase, reflecting the strength of consumption-led demand during the first three months of the year as people enjoyed their lives after almost a year of intermittent restrictions on mobility. 

Distilleries Company remained mostly resilient even throughout the pandemic, though a brief setback during the height of the pandemic last year. 

Distilleries contributed Rs.20 billion to government coffers as excise duties during the three months alone while for the full year, such duties amounted to Rs.66.2 billion. That is besides the corporate income tax paid by the company at the highest tax bracket applicable for a sin business. 

Besides distilling, 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, hospital through Melsta Hospitals Ragama and other diversified holdings in many other businesses such as textiles, media and others through Aitken Spence PLC. 

Aitken Spence is a 50.3 percent owned subsidiary of Melstacorp and the company is into tourism, maritime and logistics, power generation and other numerous services. 

Meanwhile, the plantations sector did better than the year earlier period with revenues improving and the operating results turning to profit, while telecommunications cut losses and its insurance business did better.

The group reported operating profits of Rs.4.48 billion for the three months under review, up 42 percent from the same period in 2020, as it generated higher other operating incomes and kept its overheads to a minimum. 
The group reported earnings of Rs.2.07 a share or Rs.2.4 billion for the January-March 2021 quarter compared to earnings of 58 cents a share or Rs.678.2 million in the same period in 2020. 

The group’s bottom line was also cushioned by a net finance income of Rs.71 million from a cost of Rs.700 million in the same period last year as the group became a benefactor of low interest rates. 

For the full year ended March 31, 2021 the group reported earnings of Rs 4.19 a share or Rs.4.88 billion compared to earnings of Rs.3.22 a share or Rs.3.75 billion. The full year revenue was Rs.143.9 billion, down 7 percent. 

Business magnate Harry Jayawardena controls 57 percent of Melstacorp in concert with other entities he owns.