Richard Pieris reports Rs 2 b profit Excellent nine month results:

The Richard Pieris Group recorded a turnover of Rs 7.3 billion and an operating profit before finance cost of Rs 1.1 billion for the three months ended December 31, 2010. The turnover for the nine months ended December 2010 was Rs 20 billion resulting in a Group operating profit of Rs 2.5 billion before finance costs and taxation.

During the nine months ended on December 31, 2010 the group turnover increased by 22 percent with a 98 percent staggering growth in Profits from Operations before finance costs.

The Group has continued its steady performance reporting substantial profits and growth. The reported results are solely from operating businesses and do not include any gains which are of a capital nature.

During the last 12 months the Group debt levels reduced by Rs 854 million to Rs 4.3 billion by end December 2010.

The reduction on borrowings had a direct impact on finance costs where a saving of finance cost of Rs 518 million has been made year to date when compared to the corresponding period of the previous year.

The Retail Sector continued its steady performance with a turnover of Rs eight billion and an operating profit of Rs 617 million during the nine months ended December 31, 2010. The turnover of this segment grew by 19 percent when compared to the previous year with an increase of 55 percent in the Operating Profit.

December 2010 would be a month to remember in the ‘Retail History’ where a 50,000 square foot super centre was opened in Wattala.

The Tyre Sector recorded a turnover of Rs 1.9 billion, a growth of 24 percent and an Operating Profit of Rs 196 million during the nine months ended December 31, 2010 compared to an Operating Profit of Rs 244 million reported in 2009.

This is a remarkable achievement considering the fact that natural rubber prices were at its highest during the period under review and continue to increase. During the quarter the Tyre sector entered a new market segment and now caters to ‘Radial Truck Tyres’. The continuous increase in rubber prices is a concern but the sector is well placed to overcome this by various mitigating strategies.

The Plantations Sector had very successful results recording a turnover of Rs 5.6 billion and an operating profit of Rs 1.3 billion during the nine months ended December 31, 2010 reporting a growth of 20 percent in turnover and a significant growth of 323 percent in operating profits.

It is pertinent to note that in the prior year the plantations sector absorbed a cost of Rs 659 million on account of gratuity and back wages consequent on the revision of the collective agreement.

Tea prices which declined during the first quarter improved in August last year and continued to increase from the second quarter to the third quarter. All three plantation companies experienced increases in production of tea in comparison to the previous quarter. The rubber prices in the market remained strong even during the third quarter and recorded the highest prices ever, mainly due to the short supply in the global market.

source - www.dailynews.lk