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The Carson Cumberbatch Group ended the financial year 2002/2003 with a consolidated turnover of Rs. 4.05 Billion and consolidated profit before tax of Rs. 745.64 Million recording growth rates of 24 per cent and 132 per cent compared to the previous year. The Group's Chairman Tilak de Zoysa said in the Annual Report that the main contributors to this performance were the two core businesses of plantations and brewery, which together accounted for 72 per cent of consolidated profit before tax. The Group's consolidated profit after tax was Rs. 620.77 million and it has proposed to declare a dividend of 50 percent for the year.

"We have always been of the view that core businesses of the Group, viz-brewing, oil palm and investment holdings, offer significant potential for future growth and have therefore chosen to focus financial resources and management time on them. This decision appears to have been justified given the results we have secured this year.

The decisions made in the past to divest low performing and marginal businesses and assets too paid off, since they ceased to be a strain on the resource of the Company," de Zoysa said.He said the performance of the palm oil business in South East Asia was enhanced by the performance of PT Agro Indomas, the Company's subsidiary based in Indonesia which contributed Rs. 311.42 million to profit before tax. "We expect the entire plantation in Central Kalimantan to have reached full maturity by 2004/2005 and this would result in the optimum returns being secured from this company from then.

The company became a self-financing venture during the year under review and its debt servicing pressure would begin to ease once the capital repayments on the loans commence from June 2003.

Sector performance was further supported by strong prices for palm oil in the global edible oil market, though there are mixed views on how firmly these prices would hold into the future.

Nevertheless, our management attention would be focused on improving the plantations and mill productivity and keeping unit costs at low levels so that sensitivity to price fluctuations can be minimised, and break even levels brought down," the Chairman said.

He said the brewery sector's performance improved, supported by the improved economic conditions and greater purchasing power driving consumption.

"The liberalisation of retail licensing for soft alcohol is a step in the right direction towards rationalising the regulatory framework and moving it towards commonly accepted international practice. Expediting the implementation of these reforms is important if the benefits are to be felt fully. Over a period of time, the social benefits of reduced illicit liquor consumption would begin to be felt together with an overall drop in per capita alcohol consumption in the country," de Zoysa said.

He said the investment holdings sector led by the Guardian Group recorded a satisfactory performance supported by increased activity levels at the Colombo Stock Exchange but two other businesses have not yet felt the benefits of the growth in the economy fully due to over capacity in their own industries and the less than expected revival in demand.

"Despite this the real estate business continued to generate a stable return, supported by strong occupancy levels and rentals that matched market rates.

The tourism industry showed signs of recovery but like many industry players, the performance of Pegasus and Giritale Hotels are still strained by their debt burden and operating losses carried forward. Operations at Pegasus Hotel were scaled down during the year and it is now producing better results than in the past," de Zoysa said.

He said however, Carsons expects to divest its hotels business since it lacks the competitive advantages required to survive in the mass tourism market on which Sri Lanka is so dependent.

"The Airline representation business recorded an improved performance, supported by a growth in demand for air travel. Our future strategy will focus on strengthening our core businesses and improving their competitiveness through the deployment of good management practices, improving the skills and capabilities of our staff, acquiring essential knowledge and competencies and managing our resource base and cost base more effectively," de Zoysa said.

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