Defensive cash flows add massive tailwind to CIC Holdings’ 3Q performance

• Group revenues surge 72% to Rs.19.5bn while earnings soar 82% Rs.2.1bn

Kicking off the December 2022 quarter earnings season, CIC Holdings PLC reported some robust top and bottom line performances for the three months, reflecting that the group operates with businesses which provide them with safety from the adversities in the economy and the red hot prices. 

The diversified conglomerate with a sizable footprint in the agriculture and livestock industries, particularly through its fertiliser manufacturing and importing vertical, reported revenues of Rs.19.45 billion for the October – December 2022 quarter (3Q23) compared to Rs.11.33 billion in the corresponding period in 2021. This marked a solid growth of 72 percent. 
The group’s agriculture and livestock divisions were better poised to take advantage of all encompassing focus of the country to provide the farmer with seamless supply of chemical fertiliser and agro-chemicals needed for paddy and other agricultural activities to prevent the country from going into a food shortage. 

As the country entered 2022, there was a specter of food scarcity on the horizon as the previous year’s organic fertiliser experiment pursued against the expert advice went completely awry, threatening the country’s food security.  The situation became more pronounced when the economy collapsed after it ran out of foreign exchange required to make up for any shortage of local food supply amid the soaring food and other commodities prices in the global market in response to the Russia’s invasion of Ukraine, as it disrupted the global food supply chains. 

In addition to the above two segments, CIC has interests into health and personal care and industrial solutions, which also produced better results in the last three months. 
The group reported operating profits of Rs.4.87 billion in the three months, up from Rs.1.85 billion in the same period a year ago, which translated into a massive 163.5 percent rise. 
Net finance cost surged from Rs.197.9 million to Rs.1,043.6 million as the group appears to be feeling the heat from the massively elevated borrowing costs in the economy. 
CIC reported earnings of Rs.5.52 a share or Rs.2.00 billion for the three months under review compared to earnings of Rs.3.03 a share or Rs.1.1 billion in the year earlier period. 
For the nine months ended in December 2022, the group reported earnings of Rs.17.29 a share or Rs.6.5 billion compared to earnings of Rs.6.96 a share or Rs.2.6 billion in the comparable period in 2021. 

The revenues for the nine months jumped 75.8 percent to Rs.52.5 billion, reflecting the defensive nature of group businesses. 
Paints & General Industries Limited controlled by the Captain family had 53.31 percent stake in CIC as at December 31, 2022 while the Employees’ Provident Fund held 9.06 percent being the company’s second largest voting shareholder. 
During the quarter under review, Norway’s central bank Norges Bank increased its stake in the company to become the fourth largest shareholder with a stake of 3.22 percent.