E B Creasy mpany : Quarterly Financial Report as at 31.12.2022

E. B. Creasy & Company PLC (PQ 182)

INTERIM FINANCIAL STATEMENTS

For the Nine Months ended 31st December 2022

First Nine Months Performance Review - Financial Year 2022-23

The prevailing fiscal and monetary policies in the country have created an inconducive playing field for businesses. Imposition of new indirect taxes, increased tax rates and the unprecedented level of borrowing cost at 30% levels posed enormous challenges to the Group to maintain our usual revenue levels and profitability margins.

During the quarter, the Group profitability was under considerable pressure due to high cost of working capital financing, liquidity shortage in the market and increased revenue-based taxes as the Group did not pass on the rising costs to consumers.

In spite of the increase in Group revenue for Q3-FY2022-23 by 20% over that of the previous year, the Group profit before tax for the quarter dropped by almost 50% of the corresponding quarter of the previous year owing to the increase in net finance cost by 433%. The increased interest rate applied on the borrowings and the increased level of gearing to fund the incremental working capital have resulted in the intensified net finance cost. The Company, E B Creasy & Co. PLC recorded a loss before tax of Rs. 68Mn for the quarter under review, which indicates a reduction in profitability by 137% compared to the corresponding quarter of the previous year.

Nevertheless, the cumulative Group revenue and Group profit before tax for the nine months stood at Rs.17.15 billion and Rs.1.5 billion respectively, both reporting an increase of 37 per cent and 72 per cent respectively over last year. Though we witness considerable contraction in consumer spending, our key business segments, homecare, personal care, healthcare and food sectors contributed towards our success.

The present business climate has undoubtedly presented a set of unprecedented challenges to our management teams, which demands innovation, agility and a sense of urgency to respond swiftly to changes in the external environment. Even in this unprecedented business climate, the Group remains determined to fulfill its objective of seeking sustainable and profitable growth and maintain acceptable levels of return on capital employed, while ensuring our commitment towards our valued stakeholders. We remain confident that the current economic situation will get resurrected to a much sustainable setting, enabling both individuals and businesses to prosper.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

COMPANY

	Quarter Ended			Nine Months Ended
For the period ended 31st December	2022	2021	Variance	2022	2021	Variance
	Rs. '000		Rs. '000	%		Rs. '000		Rs. '000	%
Revenue	2,085,044	1,685,758	24%		5,986,914	4,056,823	48%
Cost of Sales	(1,497,811)		(1,195,117)	25%		(4,318,478)		(2,910,047)	48%
Gross Profit	587,233	490,641	20%		1,668,436	1,146,776	45%
Other Income	8,300	4,570	82%		20,794	12,670	64%
Selling and Distribution Expenses	(194,927)	(131,441)	48%		(302,786)	(238,171)	27%
Administrative Expenses	(149,036)	(151,630)	-2%		(474,659)	(444,007)	7%
Net Finance Expenses	(319,890)	(27,645)	1057%		(236,093)	(124,175)	90%
Profit/(Loss) before Tax	(68,320)	184,495	-137%		675,692	353,093	91%
Income Tax Reversal/(Expense)	26,886	(33,204)	-181%		(107,036)	(63,556)	68%
Profit/(Loss) for the Period	(41,434)	151,291	-127%		568,656	289,537	96%
Other Comprehensive Income/(Expense)
Items that will not be reclassified to Profit or Loss
Remeasurement of Retirement Benefit Obligation (net of tax)	(2,411)	(2,411)	0%		(7,233)	(7,233)	0%
Equity Investments at FVOCI - Net Changes in Fair Value	(235,193)	278,556	-184%		664,885	274,854	142%
Other Comprehensive Income/(Expense) for the period, net of tax	(237,604)		276,145	-186%		657,652		267,621	146%
Total Comprehensive Income/(Expense) for the period	(279,038)		427,436	-165%		1,226,308		557,158	120%
Basic Earnings/(Loss) per Share (Rs.)	(0.16)	0.60			2.24	1.14
Dividend per Share (Rs.)	1.00	1.00			1.00	1.00

Figures in brackets indicate deductions.

The above figures are provisional and subject to audit.

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED

	Quarter Ended			Nine Months Ended
For the period ended 31st December	2022	2021	Variance	2022	2021	Variance
	Rs. '000		Rs. '000	%		Rs. '000		Rs. '000	%
Revenue	5,779,836	4,822,858	20%		17,146,656	12,479,559	37%
Cost of Sales	(3,880,892)		(3,356,943)	16%		(11,392,207)		(8,919,855)	28%
Gross Profit	1,898,944	1,465,915	30%		5,754,449	3,559,704	62%
Other Income	45,009	17,852	152%		158,596	51,087	210%
Selling and Distribution Expenses	(676,790)	(516,182)	31%		(1,762,190)	(1,226,085)	44%
Administrative Expenses	(582,259)	(418,327)	39%		(1,678,553)	(1,186,902)	41%
Net Finance Expenses	(449,022)	(84,229)	433%		(935,829)	(329,499)	184%
Share of Results of Equity Accounted Investees	-		-	0%		-		25,505	-100%
Profit before Tax	235,882	465,029	-49%		1,536,473	893,810	72%
Income Tax Reversal/(Expense)	7,081	(71,599)	-110%		(171,533)	(141,014)	22%
Profit for the period	242,963	393,430	-38%		1,364,940	752,796	81%
Other Comprehensive Income/(Expense)
Items that will not be reclassified to Profit or Loss
Remeasurement of Retirement Benefit Obligation (net of tax)	(4,256)	(6,251)	-32%		(12,768)	(12,768)	0%
Equity Investment at FVOCI - Net Changes in Fair Value	(300,768)	331,564	-191%		770,401	342,854	125%
Other Comprehensive Income/(Expense) for the period, net of tax	(305,024)		325,313	-194%		757,633		330,086	130%
Total Comprehensive Income/(Expense) for the period	(62,061)	718,743	-109%		2,122,573	1,082,882	96%
Profit/(Loss) Attributable to:
Equity Holders of the Parent	260,546	364,227			1,358,805	693,829
Non-Controlling Interest	(17,583)		29,203			6,135		58,967
Profit for the period	242,963	393,430			1,364,940	752,796
Total Comprehensive Income/(Expense) attributable to:
Equity Holders of the Parent	(43,916)	689,331			2,115,633	1,025,200
Non-Controlling Interest	(18,145)		29,412			6,940		57,682
Total Comprehensive Income/(Expense) for the period	(62,061)		718,743			2,122,573		1,082,882
Basic Earnings per Share (Rs.)	1.03	1.44			5.36	2.74
Dividend per Share (Rs.)	1.00	1.00			1.00	1.00

Figures in brackets indicate deductions.

The above figures are provisional and subject to audit.

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STATEMENT OF FINANCIAL POSITION

	GROUP	COMPANY
As at	31.12.2022	31.03.2022		31.12.2022	31.03.2022
	Unaudited		Audited	Unaudited		Audited
	Rs. '000		Rs. '000	Rs. '000		Rs. '000
ASSETS
Non-Current Assets
Property, Plant & Equipment	7,335,562	6,288,800		4,786,999	4,657,896
Investment Property	2,800	2,800		-	-
Intangible Assets	194,228	208,080		1,820	13,063
Right of Use Asset	152,941	148,490		330,809	251,248
Investments in Subsidiaries	-	-		2,070,397	2,070,397
Other Financial Assets measured at Fair Value through OCI	2,003,261	1,149,561		1,338,575	496,645
Deferred Tax Asset	210,181		210,181		-		-
Total Non-Current Assets	9,898,973	8,007,912		8,528,600	7,489,249
Current Assets
Inventories	5,226,390	3,416,710		2,694,492	1,385,536
Trade and Other Receivables	3,635,643	3,141,472		209,348	105,642
Amount Due from Related Companies - Trade	-	1,488		295,951	1,652,122
Amount Due from Related Companies - Non - trade	120,149	66,788		382,410	336,637
Loans due from Related Parties	84,550	208,173		35,050	158,673
Income Tax Recoverable	-	2,538		-	-
Short term Investments	4,576	-		-	-
Cash and Cash Equivalents	1,092,237		1,674,251		245,123		584,125
Total Current Assets	10,163,545		8,511,420		3,862,374		4,222,735
Total Assets	20,062,518	16,519,332		12,390,974	11,711,984
EQUITY AND LIABILITIES
Equity
Stated Capital	25,731	25,731		25,731	25,731
General Reserves	9,548	9,548		9,548	9,548
Revaluation Reserve	2,627,234	2,627,234		2,283,584	2,283,584
Retained Earnings	4,169,750		2,307,663		3,365,236		2,392,474
Equity Attributable to Equity Holders of the Company	6,832,263	4,970,176		5,684,099	4,711,337
Non-Controlling Interest	326,096		340,169		-		-
Total Equity	7,158,359	5,310,345		5,684,099	4,711,337
Non-Current Liabilities
Loans and Borrowings	1,784,331	1,374,476		1,222,979	1,232,096
Lease Liabilities	224,034	208,036		347,924	269,251
Deferred Income and Capital Grants	3,814	4,008		3,814	4,008
Deferred Tax Liability	666,770	666,770		519,473	519,473
Retirement Benefit Obligations	867,781		817,952		620,301		594,093
Total Non-Current Liabilities	3,546,730	3,071,242		2,714,491	2,618,921
Current Liabilities
Loans and Borrowings	4,744,934	3,846,888		2,809,156	2,848,189
Lease Liabilities	27,787	30,965		28,048	22,276
Current Taxation Payable	168,162	89,703		109,875	28,511
Trade and Other Payables	3,260,792	3,441,202		344,144	692,676
Amount Due to Related Companies	11,711	88,131		294,167	427,483
Bank Overdrafts	1,144,043		640,856		406,994		362,591
Total Current Liabilities	9,357,429		8,137,745		3,992,384		4,381,726
Total Equity and Liabilities	20,062,518		16,519,332		12,390,974		11,711,984
Net Asset Value Per Share Rs.	26.95	19.60		22.42	18.58

The above figures are provisional and subject to audit.

I certify that these Financial Statements are prepared in compliance with the requirements of the Companies Act No.7 of 2007.

-

SGD

Ravi Rathnasekara Chief Financial Officer

The Board of Directors is responsible for the preparation and presentation of these Financial Statements.

These Financial Statements were approved and signed for and on behalf of the Board of Directors of E. B. Creasy & Company PLC.

SGD	SGD
R.C.A.Welikala	S.W.Gunawardena
Director	Director
14th February 2023

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