Finlays operating profits up 196%for first 6 months of '06

INCREASE: The provisional and unaudited results of the Group for the six months ended June 30th 2006 recorded a 196% increase in operating profit, when compared to the corresponding period of last year.

While profits from ongoing business activities increased by 11% compared to the first six months of last year, there was a one-off profit made on the sale of shares in Eagle Insurance Company Limited, amounting to Rs. 256.9 million, which resulted in the substantial increase in profitability.

The net profit after tax increased by 187% to Rs. 413.1 million. A special dividend amounting to Rs. 255.5 Mn (Rs. 7.30 per share) was declared and paid on 21st April 2006, a preliminary announcement made to the media by James Finlay and Co (Colombo) Ltd. Chairman C.L.K.P. Jayasuriya said.

The Beverage Packing division exported 4.6 million Kgs. of tea, as against 4.0 million Kgs. exported in the first six months of last year, mainly driven by the higher volume of bulk tea exports. Total tea export turnover grew by 8.1%.

However, there was a marginal decline in profit on exports, due to an upward trend in the auction prices of tea and a change in product mix which saw a higher proportion of bulk tea exports in total turnover and a lower percentage of packets and teabags.

In July, we installed three brand new IMA C27 machines for an investment of Rs. 250 million, the first Company to do so in Asia.

These machines produce stapleless teabags, which are entirely in consumption habits towards this type of environment friendly teabags and as the pioneer, we are well placed to cater to this emerging trend, the announcement further said.

The service related divisions showed encouraging results with higher turnover and profit during the first half of the year compared with the corresponding period of last year compared with the corresponding period of last year.

The Airline, Insurance and Environmental Services Divisions in particular have demonstrated robust growth, while operating in a challenging business environment, the media release pointed out, among other things.