Chemanex PLC, a subsidiary of CIC Holdings PLC, has seen revenue grow 23.6% in the year ended March 31, 2012 to Rs.679.6 million but attributable profit plunged 59.32% to Rs.33 million.
At group level, revenue was down 6.85% to Rs.999.6 million and the attributable profit down 83.8% to Rs.36.9 million.
The company’s Chairman, Mr. B.R.L. Fernando, has told shareholders in the annual report that group results for the year "remained unrewarding and far below budget and performance in the previous year."
This was largely attributed to exports being impacted by the turbulence and uncertainties in the global market with the group’s exports to the detergent industry losing out in key markets largely due to the unprecedented increases in raw material prices which was beyond the group’s control.
Additionally, there were slower returns on cost containment as well as the depreciation of the rupee, Fernando explained.
However, in the latter part of the financial year under review raw material prices had come down significantly with their foreign suppliers benefiting from an increase in production following favourable conditions specially for the production of starch.
"The devaluation of the rupee also helped with enhanced competitiveness of the full range of products we manufacture for international markets," he said.
An analysis in the report indicates that many group companies including CAL Exports, Yasui Lanka and Chemcel (Pvt) Limited had either lost or been only marginally profitable during the year under review. Chemanex Exports however increased profits after-tax to Rs.12.4 million from the previous year’s Rs.8.7 million.
Among associates, Commercial Insurance Brokers where Chemanex has a 40% interest, saw after-tax profit up to Rs.18.3 million from Rs.7.8 million the previous year while Rainforest Ecolodge with a 24% equity interest lost Rs.30.2 million against the previous year’s loss of Rs.4.8 million.
Fernando said that this hotel on the borders of Sinharaja Rain Forest in Deniyaya had begun operations during the latter part of the year under review with their investment in this venture now amounting to Rs.78.1 million.
The Ecolodge plans to increase its room capacity in the coming year to cater to short-term demand.
The company which had paid an interim dividend of 75 cents per share in March will pay a final dividend of Rs.0.75 for the year giving shareholders a distribution of 72% of the profits earned during the year.
The company’s Managing Director/CEO, Mr. M.P. Jayawardena expressed confidence that the group would perform strongly during the current financial year with the weakness of the rupee assisting their export performance. With their local operations being rapidly developed, he believed that they were headed "for some challenging but successful times."
The company’s local operations revolve around six departments – consumer chemicals, rubber chemicals, pigments and resins, estate chemicals, industrial chemicals and food products.
The group’s export portfolio comprised anti-soil redeposition agent for the detergent manufacturing industry, specialty chemicals for the textile and ceramic industries for work-wear.
The company has a stated capital of Rs.126.3 million, capital reserves of Rs.91.3 million, general reserves of Rs.232.8 million and retained earnings of Rs.676.1 million in its books. Total assets ran at Rs.1.5 billion and total liabilities at Rs.379.5 million.
The major shareholders are CIC Holdings PLC (50.41%), CIC Trustees for Charitable and Educational Trust Fund (10.33%) and Mr. S.K. Wickremesinghe (5.37%).
The company’s share with a net asset value of Rs.78.67, down from the previous year’s Rs.81.12, sold at a high of Rs.163 and a low of Rs.78 during the year under review. This compared with a trading range of Rs.174.70 to Rs.115 the previous year.
The directors of the company are: Messrs. B.R.L. Fernando (Chairman), M.P. Jayawardena (MD/CEO), A. Mapalagama (COO), D. Chandrasekera, Prof. U.P. Liyanage, S.P.S. Ranatunga, A.V.P. Silva and M.D. Wickramasinghe.