Cargills post first-half profit growth despite economic downturn

Despite the economic downturn during the current financial year, Cargills (Ceylon) Limited, has succeeded in marginally improving group profitability during the first half of the year by 3% to Rs. 24.2 million from Rs. 23.5 million a year earlier on the back of a substantial turnover increase.

Analysts considered these results as significant as Cargills is the leading supermarket operator in the country and its results reflect grocery shopping by the urban middle class as well as the more affluent.

At company level, there was a 8% dip in the first half net profit to Rs. 17.4 million from Rs. 18.9 million a year earlier.

Cargills has boosted turnover by 31% both at group and company level - to Rs. 1.7 billion at group level and Rs. 1.5 billion at company level. But cost of sales at 34% had outpaced sales growth at both group and company levels.

The company which has an issued share capital of Rs. 56 million and is a leading operator in supermarkets through its Food City chain.

Cargills posted net assets of Rs. 76.18 per share as at September 30, 2001, up from Rs. 74.32 a year earlier.

During the second quarter, the Cargills share had traded at a high of Rs. 44.75 and a low of Rs. 39.75 against a trading range of Rs. 36.50 to Rs. 30 a year earlier.