Sri Lanka: Tokyo Cement increases profits by 38%

Tokyo Cement Plc saw its April-June quarter net profit increase 38 per cent YoY to LKR643.8m (US$4.42m) amid strong top-line gains and better cost management.

Group turnover for the quarter rose nine per cent YoY to LKR7.5bn, while cost of sales rose at six per cent, allowing the group to post a gross profit of LKR1.8bn, up 20 per cent YoY.

The group was able to keep its operational costs in check as distribution and administrative costs increased only two and four per cent YoY, to LKR680.3m and LKR267m, respectively. This boosted the group’s operational profit 42 per cent YoY to LKR883.5m. However, the income tax paid for the period rose 237 per cent YoY to LKR119m.

The finance expenses rose only two per cent YoY to LKR128.8m. The group’s short term borrowings in fact declined to LKR2.7bn from LKR3.3bn during the quarter.

The earnings per share (EPS) improved to LKR1.93 from LKR1.40.

Cement sales have risen with strong demand from Sri Lanka’s private and household sectors as well as state projects recommencing, reports the Sri Lankan Daily Mirror.

The government increased the price of 50kg cement bag by LKR60 with effect from 30 June 2016 in line with the revisions to the value added tax (VAT). However, the implementation of VAT has been suspended by the courts, while no reduction in cement prices has been announced so far.