DCSL Group posts Rs. 4,175mn profit

The Distilleries Group’s consolidated turnover has grown by 21% to record Rs.56 billion from Rs. 47 billion in the previous year, group CEO, Ranil de Silva said in their annual financial year review.

The Group profit after tax was Rs. 4,175 million, an increase of Rs. 499 million over the previous financial year.

This growth of nearly 14% in the bottom line is highly commendable considering the macro economic situation that prevailed for the year under review, 2007/2008, de Silva said.

The Beverage Sector led by Distilleries Company of Sri Lanka PLC, the parent company of the DCSL Group, continues to be the main contributor to the Group’s profit.

In July 2007, DCSL acquired the holding of Pernod Ricard of France in Periceyl (Pvt) Ltd. It is heartening to note that Periceyl has already made a significant impact in the locally produced foreign liquor market and continues to be the market leader in the Brandy segment.

The results of the Financial Services Sector led by Sri Lanka Insurance Corporation (SLIC) were affected by the ridiculous pricing strategies of some competitors, which unfortunately does not augur well for the entire industry.

Nevertheless, SLIC as the only internationally rated insurance company in Sri Lanka strengthened its policy of being a market oriented and innovative insurance provider especially in conjunction with our own “Formula Plus” collision repair facility.

Sri Lanka’s largest mutual fund; National Asset Management Ltd. (NAMAL), performed creditably to record an increase of 81.2% in net profit during the year under review and maintained its position of leadership in the Mutual Fund Management arena.

The plantation sector was a major success story for the Group with both Balandoga Plantations PLC and Madulsima Plantations PLC recording significant improvements in profitability.

Although the country’s Tea production declined by 2% in 2007, the prices for Sri Lankan Tea appreciated significantly during the year contributing to this satisfactory result.

However, the increase in fertiliser and labour cost continue to adversely affect the returns to our shareholders.

In the telecommunication sector, Lanka Bell the second largest fixed line operator with over a million subscribers performed satisfactorily despite the intense price competition.

The company further consolidated its position as the leader in CDMA technology during the year.

In the healthcare sector, Lanka Hospitals Corporation operates the renowned Apollo Hospital in Colombo. The year under review was one of consolidations since our recent acquisition of the Hospital.

“We believe that our efforts to streamline the management and the operations and also attract a wider clientele have paid off and we are now in a position to turn this venture around in the coming year”, de Silva said.