Cargills Ceylon : For the Three Months Ended 30th June 2023

CARGILLS (CEYLON) PLC

Condensed Interim Financial Statements

For the Three Months Ended

30th June 2023

CONTENTS

Management Review	01
Statement of Profit or Loss and Other Comprehensive Income	02
Statement of Financial Position	03
Statement of Changes in Equity	04
Statement of Cash Flows	05
Segment Information	06
Explanatory Notes	07
Investor Relations Supplement	08
Corporate Information	IBC

Management Review

Period ending 30th June 2023

Cargills (Ceylon) PLC is pleased to announce the consolidated financial results for the three months ended 30 June 2023. The Group delivered a commendable performance during the quarter, despite many challenges. For the three months ended 30 June 2023, the Group recorded a revenue of Rs. 56,753 Mn (increase of 18% YoY) and an operating profit of Rs. 3,912 Mn (increase of 30% YoY) and a Profit Before Tax of Rs. 2,496 Mn (increase of 20% YoY). The Group recorded a Profit for the period of Rs. 1,310 Mn, which was a decrease of 16% YoY, due to the dividend tax expense.

The Management took a collective decision to not pass any cost increases to the consumer, who has been significantly burdened by inflation over the last year. The Management's focus has been to curtail any price increases, grow volumes, and improve profitability. We are pleased to note that during the period under review, our teams have been able to deliver on all three outcomes. Our FMCG and Restaurant businesses refrained from taking any price increases, which supported volume growth during the period under review compared to the corresponding period of the previous year. In the Retail business, our teams worked proactively to provide better prices for consumers on price-marked products, while we continued to deepen our engagement with agricultural producers to reduce the prices of perishables and commodities for the consumer. We are pleased to note that many key categories such as perishables have recorded volume growth compared to the previous year. All three operating segments - Retail, FMCG and Restaurants - achieved improvements in gross margins compared to the corresponding period of the previous year. The Management remains committed to bringing further improvements to operations to drive efficiency, increase cost savings, and pass benefits to the consumer, while improving profitability of the Group.

Throughout this period, the Management remained steadfast in its commitment to creating value for customers and partners, while optimizing operations across all business segments. In particular, we have accelerated initiatives to improve connectivity and digitalization within the organization. Investments have been made to digitalize the agriculture and dairy supply chains, and significant upgrades have been made to the Sales Force Automation system to increase coverage and penetration within the FMCG general trade universe. We expect the benefits of these investments to accrue over the upcoming months and years.

In the months ahead, the Management will continue to refine and optimize its operations to drive efficiency across the entire organization. The company is on track to achieve the goals set at the start of the 2023/24 Financial Year and will use learnings from the past year to further improve our operations and cost structures over the months ahead. Through this process, our goal is to continuously deliver shareholder value while meeting the demands of our customers and upholding our responsibility to the community. Measures will be taken to strengthen our engagement with customers, ensuring that our brands resonate in the market and consolidate their market leading positions. The Management endeavors to further drive volume growth and market share expansion, through selective investments and improved asset utilization.

The Katubedda Cargills Square mall was opened in May 2023, and the Bandarawela mall will be opened during the month of August. We are pleased to note encouraging customer patronization and occupancy levels, above 80% during the period under review, at the Cargills Square malls in Jaffna, Gampaha, and Dematagoda. The expansion of the cheese plant in Hatton as well as the expansion of the smallgoods processing facility in Ja-ela to introduce a new halaal range of products will be commissioned in the coming months, further supporting the growth of our FMCG business. The Management is optimistic about the future opportunities for the Group, particularly in light of the improving macroeconomic environment in the country which supports a recovery in consumer spending, with declining price levels, reducing market interest rates, and a resurgence in the tourism sector.

01

Cargills (Ceylon) PLC

Condensed

Interim

Financial

Statements 30

June 2023

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		GROUP			COMPANY
For the three months ended 30 June	Rs. '000 2023	Rs. '000 2022	Change %	Rs. '000 2023	Rs. '000 2022	Change %
Revenue	56,753,468	47,974,504	18.30	8,194	11,147	(26.49)
Cost of sales	(50,204,079)	(42,744,275)	(17.45)	(7,983)	(10,903)	26.78
Gross profit	6,549,389	5,230,229	25.22	211	244	(13.52)
Other income	547,746	551,255	(0.64)	2,821,099	418,096	574.75
Distribution expenses	(1,693,981)	(1,353,403)	(25.16)	-	-	-
Administrative expenses	(1,491,033)	(1,421,463)	(4.89)	(518,892)	(372,111)	(39.45)
Results from operating activities	3,912,121	3,006,618	30.12	2,302,418	46,229	4,880.46
Finance income	278,516	278,680	(0.06)	282,590	141,019	100.39
Finance cost	(1,737,119)	(1,178,084)	(47.45)	(459,882)	(269,516)	(70.63)
Net finance costs	(1,458,603)	(899,404)	(62.17)	(177,292)	(128,497)	(37.97)
Share of profit / (loss) of
equity accounted investees, net of tax	42,278	(23,154)	282.59	-	-	-
Profit/(loss) before taxation	2,495,796	2,084,060	19.76	2,125,126	(82,268)	2,683.17
Income tax expense	(799,207)	(532,954)	(49.96)	3,605	25,388	(85.80)
Profit/(loss) after tax before dividend tax expense	1,696,589	1,551,106	9.38	2,128,731	(56,880)	3,842.49
Tax effect of dividends paid to equity holders	(386,517)	-	(100.00)	-	-	-
Profit/(loss) for the period	1,310,072	1,551,106	(15.54)	2,128,731	(56,880)	3,842.49
Other comprehensive income (OCI)
Items that will not be reclassified to profit or loss
Share of other comprehensive income
in equity accounted investee, net of tax	62,070	(26,300)		-	-
Net change in fair value of FVOCI financial assets	(10,587)	10,388		(10,587)	10,388
Other comprehensive income for the
period, net of tax	51,483	(15,912)		(10,587)	10,388
Total comprehensive income for the period	1,361,555	1,535,194		2,118,144	(46,492)

Profit attributable to :

02

Cargills (Ceylon)

PLC

Condensed

Interim Financial

Statements 30

June 2023

Equity shareholders of the parent	1,323,437	1,555,705	2,128,731	(56,880)
Non controlling interest	(13,365)	(4,599)	-	-
Profit/(loss) for the period	1,310,072	1,551,106	2,128,731	(56,880)
Total comprehensive income attributable to:
Equity shareholders of the parent	1,374,920	1,539,793	2,118,144	(46,492)
Non controlling interest	(13,365)	(4,599)	-	-
Total comprehensive income for the period	1,361,555	1,535,194	2,118,144	(46,492)
Basic Earnings per share (Rs.)	5.14	6.04	8.26	(0.22)
Diluted Earnings per share (Rs.)	5.14	6.04	8.26	(0.22)

Explanatory notes are given on page 7.

STATEMENT OF FINANCIAL POSITION

Explanatory notes are given on page 7.

I certify that the financial statements have been prepared in accordance with the requirements of the Companies Act No. 7 of 2007.

(Signed.)

Dilantha Jayawardhana

Executive Director

The Board of Directors is responsible for the preparation and presentation of these financial statements.

Signed on behalf of the Board

(Signed.)	(Signed.)
Ranjit Page	Imtiaz Abdul Wahid

Deputy Chairman / Group Managing

Group CEO Director / Deputy

CEO

08 August 2023

Colombo

	GROUP	COMPANY
As at	30 June 2023	31 March 2023	30 June 2023	31 March 2023
Rs. '000	Rs. '000	Rs. '000	Rs. '000
Assets
Non-current assets
Property, plant and equipment	46,659,050	46,922,982	3,447,612	3,461,947
Right of use asset	21,100,337	20,641,258	996,805	1,016,611
Investment property	8,026,119	7,342,566	3,295,239	3,293,903
Intangible assets	1,584,153	1,582,713	137,913	145,907
Investment in subsidiaries	-	-	5,960,269	5,960,269
Investment in equity accounted investees	4,468,609	4,364,261	4,717,843	4,717,843
Other financial assets	1,559,356	1,569,942	1,558,875	1,569,461
Prepayment on leasehold land and buildings	200,912	200,912	-	-
Biological assets	30,557	23,873	-	-
Deferred tax assets	35,103	27,829	-	-
Total non-current assets	83,664,196	82,676,336	20,114,556	20,165,941
Current assets
Inventories	20,846,064	22,872,826	-	7,646
Biological assets	59,592	33,681	-	-
Trade and other receivables	11,589,316	9,851,088	1,013,574	683,722
Amounts due from related companies	384,329	391,668	4,821,312	4,007,984
Other financial assets	121,920	119,667	-	-
Cash and cash equivalents	8,831,518	4,841,416	3,029,660	7,933
Total current assets	41,832,739	38,110,346	8,864,546	4,707,285
Total assets	125,496,935	120,786,682	28,979,102	24,873,226
Equity
Stated capital	6,841,068	6,841,068	6,841,068	6,841,068
Reserves	6,698,368	6,708,955	357,726	368,313
Retained earnings	12,722,417	13,527,172	4,609,944	4,671,475
Total equity attributable to equity holders of the company	26,261,853	27,077,195	11,808,738	11,880,856
Non-controlling interest	3,827,247	3,840,612	-	-
Total equity	30,089,100	30,917,807	11,808,738	11,880,856
Liabilities
Non-current liabilities
Interest bearing loans and borrowings	3,444,849	4,114,873	2,220,600	2,789,844
Lease liability	22,748,289	22,921,256	941,886	962,697
Deferred tax liability	1,213,230	1,337,651	471,917	484,151
Capital grants	1,623	4,493	-	-
Employee benefit liabilities	1,947,841	1,833,667	785,309	726,702
Total non-current liabilities	29,355,832	30,211,940	4,419,712	4,963,394
Current liabilities
Trade and other payables	24,619,263	27,936,283	316,020	564,587
Current tax liabilities	6,439,132	5,954,905	289,824	417,017
Amounts due to related companies	24,044	6,407	759	1,286
Dividend payable	105,195	78,673	105,195	78,673
Interest bearing loans and borrowings	33,489,729	24,342,847	11,991,768	6,932,669
Lease liability	1,374,640	1,337,820	47,086	34,744
Total current liabilities	66,052,003	59,656,935	12,750,652	8,028,976
Total liabilities	95,407,835	89,868,875	17,170,364	12,992,370
Total equity and liabilities	125,496,935	120,786,682	28,979,102	24,873,226
Net Assets value per share (Rs.)	101.92	105.08	45.83	46.11

03

Cargills (Ceylon) PLC

Condensed

Interim

Financial

Statements 30

June 2023