Lankem Ceylon PLC announces turnaround performance for first half

Lankem Ceylon PLC, a diversified conglomerate with interest in the areas of agriculture, consumer products, hotels, industrial chemicals, industrial flooring, decorative paints, printing & packaging and pest control posted a noteworthy second quarter (2Q) results which resulted in a remarkable turnaround performance for the first half (H1) of the financial year 2022/23. 
During the quarter ended 30th September 2022, the Lankem Ceylon as a Group recorded a profit of Rs. 958 million which was a 73 percent growth compared to the 1st quarter of 2022/23 and a total change over compared to the Rs. 19 million loss made in 2Q of the last financial year ( 2021/2022).

Second quarter revenue was Rs. 8.3 billion which was a 58 percent growth compared to the same period last year while the Gross Profit (GP) for the said period was Rs. 2.7 billion, a 210 percent growth compared to the Rs. 882 million achieved during the same period last year.   

During the quarter under review, Profit Before Tax (PBT) was Rs. 1.15 billion, a 4046 percent growth compared to the corresponding quarter in the previous year.
From a level of breakeven during the financial year 2021/22 to profitability in six months, the Group recorded a net profit of Rs. 1.5 billion for the first half (H1) of 2022/23 when compared to the loss of Rs. 91 million incurred during the corresponding period last year. 

The Group revenue in the first half stood at Rs. 15.9 billion, a 64 percent increase, when compared to the Rs. 9.7 billion, achieved during the same period last year.  Aggressive pricing strategies which contributed towards improving the product margins together with the cost optimization initiatives which were adopted across all segments is said to have enabled the Group to achieve this feat.

The Group’s packaging cluster, which includes JF Packaging (Pvt) Ltd, Acme Printing and Packaging PLC and recorded an outstanding performance during these six months to achieve an operating profit of Rs. 1 billion compared to the minor loss reported last year. The cluster, which underwent a complete transformation during the period of review, worked diligently towards reducing the production costs by 50 percent which brought in a significant improvement at the contribution level. 
The Consumer cluster of the Group which comprise of C.W. Mackie PLC almost doubled their revenue during the first half of 2022/23 in comparison to the previous period to achieve
Rs. 3.6 billion. 

The cluster further reported an operating profit of Rs.702 million which was a commendable improvement from that of last year’s H1. During the quarter ended 30th September 2022, the cluster recorded Revenue of Rs. 1,812 million and operating profit of Rs. 361 million respectively, which was a 102 percent growth in revenue and a 106 percent growth in operating profit compared to the first quarter of 2022/23.  
Change of marketing strategies to give customers value for money during trying times in addition to the change of pricing structures is said to have worked well for the cluster which enabled it to contribute positively towards the Groups’ achievements. 

Despite the downturn in the tourism industry over the past few months, the Leisure cluster also saw a revenue growth of 53 percent and 52 percent for H1 and Q2 ended 30th September 2022 respectively.  However, the segment was not able to achieve profitability given the lower occupancy. 
Lankem Ceylon PLC is a subsidiary of The Colombo Fort Land and Building PLC. The members of the Board of Directors are  S.D.R. Arudpragasam (Chairman), A. Hettiarachchy (Deputy Chairman), Suren Goonewardene (Managing Director), A.C.S Jayaranjan, R. Seevaratnam, P.M.A. Sirimane, Anushman Rajaratnam, G.K.B. Dasanayake and
Dr. A.M. Mubarak.