Lankem returns to Profit after FY 2014/15, Group Revenue increase by 14% | Daily News

Lankem returns to Profit after FY 2014/15, Group Revenue increase by 14%

Lankem Ceylon PLC posted a strong Q4 performance for the FY 2020/21 recording a Pre-Tax Profit of Rs.229 million against a Loss of Rs.185 million as reported in 2019-20. The company achieved a quarterly revenue of Rs.1 billion recording a growth of 78% in comparison to the same period as last year.

These results were achieved amidst the Covid -19 pandemic which disrupted markets, including global supply chains. These resulted in organizations having to change their strategies putting a huge strain on operating models. Despite these challenges, the Company was able to change their strategies accordingly ensuring the right product mix was available at the right time to meet seasonal demand.

As a result, Paint and the Crop Protection divisions of the Company were able to meet and deliver exceptional performance in meeting seasonal demand for the Avurudhu Maha and Yala season resulting in the Company achieving a Gross Profit of Rs.260Mn for the quarter versus Rs.138Mn the previous year.

“The company closed the financial year on a high, achieving a revenue of Rs.3.4 Bn in comparison to Rs.2.9Bn achieved in the previous year, recording a growth of 18%. Commented Suren Goonawardene, Managing Director, Lankem Ceylon PLC.

“The Gross profit of Rs.827Mn is an increase by 46% compared to 2019/20. The improvement in margin is a result of optimizing the sales mix in addition to the stringent cost management initiatives that were implemented by restructuring the operation at our manufacturing plants. This has resulted in a drastic reduction of operational losses while the ongoing business restructuring has greatly supported company performance. This resulted in the EBIT of the company closing at Rs.521Mn against Rs.66Mn reported in 2019-20”.

The reduction of interest rates has immensely contributed towards improved liquidity, mainly due to the accommodative monetary policy introduced by the Central Bank of Sri Lanka to support the revival of economic activity. The savings by way of interest cost of Rs.106Mn for the year is a mere 18% reduction compared to the previous financial year. Furthermore, the debt moratorium extended to the private sector by the government/Central Bank enabled the corporate sector to sustain cash flows in an extremely challenging year.

Goonawardene further stated that “For the first time after FY 2014/15 the company has reported a Profit Before Tax of 36Mn signaling a positive momentum for the future of the company,” Goonewardene concluded.

Lankem Ceylon as a Group which comprises of hospitality, packaging and distribution clusters posted a revenue of Rs.17.6Bn recording a growth of 14% against the previous FY with better than expected results reported from the distribution sector.