Business News from Sri Lanka: The profit after tax of the Melstacorp group for the financial year 2018-19 was Rs. 8.9 billion compared to the figure of Rs. 6.2 billion of the previous year, an increase of 41 percent. Group turnover reached to Rs. 156 billion and in the same financial year the Group contributed Rs. 64 billion as taxes. Melstacorp has a Rs. 51 billion market capitalization.
The revenue from the beverage sector reached Rs. 87 billion for the period under review and net profit after tax was Rs. 5.8 billion. During the year, the company noted a significant decrease in volume of alcohol. The sector’s contribution to tax on the State has been decreased. Pricey, the Group’s second-largest liquor company, saw its profitability shrink compared to last year due to a significant volume decline.
During the year, Lanka Bell, a subsidiary, registered a positive EBITDA. For the financial year, the industry lost Rs. 2 billion. In the annual report, Chairman D. H. S. Jayawardena said, “We continue to look at the most desirable options for exiting this industry.” Continental Insurance, another subsidiary, recorded an increase in gross written premium of 26 percent year-on-year. During the year, the Company recorded a gross written Rs. 4 billion premium.
In his statement, Jayawardena said, “With the Group holding more than 50%, Aitken Spence PLC, a member of the Group since the 1990s, has completed its first full year as a Melstacorp subsidiary. Aitken Spence is one of the most diverse conglomerates in Sri Lanka, deriving 43% of its profits from overseas operations with a presence in the tourism and maritime and logistics sectors in eight countries. Overseas assets constitute 35% of the Aitken Spence Group’s total assets.
Bogo Power, which was commissioned in December 2011, has been profitable since the start of operations. “In the planting sector, the company has invested over Rs. 500 million in field development capital expenditure, upgrading factories and machinery, buildings, agricultural vehicles, replanting and crop diversification during the year under review. The annual report notes’ While the plantation sector has reported losses, we continue to support and finance operations with the expectation of a plantation turnaround in the interest of industry and nation.’
In October 2018, Fitch Ratings rated Melstacorp with a Stable Outlook as a National Long-Term Rating of’ AAA (lka). Fitch also put a “AAA (lka)” National Long-Term Rating with a Stable Outlook on the Distilleries Corporation subsidiary. Note 26 The report’s cash and cash equivalents state that the favourable balances categorized under current assets total Rs 10.7 billion at group level (Rs 11.7 billion 2018) and unfavorable balances categorized under current liabilities total Rs 35.6 billion at group level (Rs 18.5 billion 2018).