GRAN - 31-03-2012 Interim Report

Monster · 1 GRAN - 31-03-2012 Interim Report Mon May 14, 2012 8:05 pm

Monster

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Poultry firm Ceylon Grain Elevators has come up with disappointing 1Q report. Revenue rose 42%, which is a significant improvement. However, net profit dropped 99% due to heavy financial expenses. Net profit the for the quarter is only Rs 0.57 million, which was 94 million in the same period last year.

Rupee value depreciation against USD was the major reason for 153 million financial expenses. Interim statement says group net asset is Rs 54.67. Currently GRAN is trading between Rs 41 and 46, which is below it's net asset value.

GRAN - 31-03-2012 Interim Report Gran10

manula · 2 Re: GRAN - 31-03-2012 Interim Report Mon May 14, 2012 10:46 pm

manula

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very sad... I think GRAN and TFAL is many members favourite share ne...Hope TFAL report also not helathy

hariesha · 3 Re: GRAN - 31-03-2012 Interim Report Mon May 14, 2012 11:04 pm

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This is a one off item. A provision for Rupee depreciation against a USD loan. They have a loan due to an affiliate company named "Hapiways Management Services Pte Limited" which is a Singapore based company. As USD has increased by about Rs. 15 within three months this provision has to be made. We have to worry, only if Rupee depreciated heavily again which is highly unlikely.

Their Gross profit has increased by 27% and Operating profit has increased by 21% which is highly encouraging.

Further their Associate Company TAFL has done extremely well. I think chicken companies are now in attractive prices both in terms of EPS and NAVPS. Chicken companies will do well as consumption is clearly growing. GRAN turnover has increased by 41%. If you a consumer in Sri Lanka, you may be experiencing this as Fish prices has gone up by about 70% within 5 months (1 Kg of Tuna is above Rs.950/-).

So investments in chicken companies will be good for the future.

TAFL PER < 5x , PBV - 1.29
If we remove one off item,
GRAN PER <6.2 PBV 0.76

There are only few sectors in CSE which is going attractive in the future.

Rubber Plantations, Companies with exports , Chickens, Banks, Hotels

Monster · 4 Re: GRAN - 31-03-2012 Interim Report Mon May 14, 2012 11:44 pm

Monster

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manula wrote:very sad... I think GRAN and TFAL is many members favourite share ne...Hope TFAL report also not helathy

True, there are many members, who love poultry shares as well as there are many, who hate these shares. Drop in the net profit is mainly due to rupee value depreciation. I don't think it will effect heavily in the next quarter. As hariesha stated, turnover has increased, which is encouraging. Currently I do not hold any shares on GRAN. GRAN was one of a share, which made me a happy investor in early 2011.

Still EPF and Laughs are holding their stake, which they purchased between 210 - 240 in 2011. Just image the unrealized loss they incurred.

worthiness · 5 Re: GRAN - 31-03-2012 Interim Report Tue May 15, 2012 8:55 am

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Government efforts to control the currency depreciation so far are unsuccessful. It seems further measures are to be taken to reduce the imports bill. If it is floating in a range of Rs115-120, finance cost on oversea loans borrowed by local companies would be bit lower.

Poultry companies may offset heavily burden finance cost by widening the export market, provided the overseas demand exist with excess production capacity. I am not sure the offshore market penetrated by poultry companies TAFL,GRAN & BFL. Can someone educate us please?

econ · 6 Re: GRAN - 31-03-2012 Interim Report Tue May 15, 2012 2:30 pm

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depreciation of rupees has created lot of problems for almost all companies who took foreign exchange loans.. still that idiotic cabraal bugger controlled central bank promotes private companies to borrow from foreign countries..