Fair value gains boost Elephant House profits
The food and beverages unit of John Keells Holdings PLC (JKH), Ceylon Cold Stores PLC’s (CCS) net profit for March quarter (4Q12) rose almost 4000 percent as a result of a massive fair value gain of over Rs.1 billion, which was also reflected in JKH’s profits.
The revenue during quarter rose 22 percent Year-on-Year (YoY) to Rs.5.2 billion and gross profit also grew 78 percent YoY to Rs.664 million despite a 14 percent increase in costs.
Earnings Per Share (EPS) for the quarter stood at Rs.16.36, significantly up from corresponding quarter’s 41 cents.
CCS’s net profit for FY 12 also rose over 1000 percent YoY as a result of the fair value gain in the March quarter. The gross profit during the period also rose 46 percent YoY to Rs.3 billion, following a 22 percent increase in revenue.
According to notes to the financial accounts, the freehold land at Glennie Street and Justice Akbar Mawatha were revalued by an independent professional valuer.
“The land was valued at their open market/fair value and the surplus arising from the revaluation was transferred to the revaluation reserve and freehold land value was reclassified as investment property due to change in nature of use,” a note said.
Another note said the firm’s freehold land in Trincomalee was also revalued at the open market/fair value and surplus was reclassified as investment property.