C.W. Mackie turnover increases

C.W. MACKIE and Company Limited turnover during 2004 showed a 54.5% increase over 2003, principally due to higher prices achieved on exports of Crepe Rubber, Technically Specified Rubber (TSR) and from sugar trading.

The profit from operations of Rs. 71.9 million includes a net dividend from Scan Products Holding Company Limited of Rs. 23.5 million.

Lower interest rates, a progressive retirement of overall debt and a reduction in provision for exchange loss resulted in lower net financing cost of Rs. 38.3 million compared with Rs. 60.7 million in 2004.

The provision of Rs. 9.8 million on account of exchange losses on the Danish Kroner denominated long term loan from The Industrialisation Fund for Developing Countries (IFU) was much lower than in 2003. (Rs.23.4 million) because 60% of the loan was hedged by means of a Danish Kroner 6.0 million fixed deposit to reduce the impact of exchange losses due to the continuing depreciation of the Sri Lanka Rupee.

Natural Rubber production increased marginally from 92.0 million Kg. in 2003 to 94.8 million Kg. in 2004. Crepe Rubber production accounted for 19.5% as compared with 24% of total output in 2003.

The prices of Latex Crepe, the principal grade of Natural Rubber traded by the Company, rose by as much as 18% in 2004 as compared with 2003.

Sales of Latex Crepe and TSR contributed a gross trading profit of Rs. 61.6 million (2003-Rs. 23.5 million).

Coconut consumption price of coconuts increased by 37% in 2004 as compared with 2003 and the average price of Desiccated Coconut increased by 18% (from Rs. 78/- per Kg. in 2003 to Rs. 92/- per Kg. in 2004).

The gross trading profit on sales of sugar was Rs. 13.2 million (2003-Rs. 6.7 million).

The Company has brought forward tax losses of Rs. 256.5 million. However, the tax losses previously fully allowed to be deducted under Section 29 of the Inland Revenue Act No.38 of 2000, as amended, has been restricted to 35% of the total statutory income from the year of assessment 2004/2005.

The company's profit for the year 2004 is, therefore, liable to tax of Rs. 4.5 million.

Similarly, the profit for the year of Ceymac Rubber Company Limited which also has brought forward tax losses of Rs. 60.7 million is liable to tax of Rs.2.9 million on current year's profit.