Sri Lanka’s Tokyo Cement profit down 94 pct as cost rose, price controls bite

ECONOMYNEXT – Profit in Tokyo Cement Plc, which runs grinding plants in Sri Lanka and also distributes
imported cement, fell 94 percent to 127 million rupees in the September quarter from a year earlier,
as cost rose.

Sri Lanka’s cement producer were hit by price controls as input costs rose globally amid Federal Reserve money printing and the domestic money printing drove the rupee down

The firm reported earnings of 32 cents for the quarter. In the six months to September 2021, Tokyo
Cement reported earnings of 1.06 rupees, on total profits of 424 million rupees against a profit of 2.8
billion rupees last year.

The company’s stock closed 0.8 percent up at 50.90 rupees up on the last trading session.

Revenues rose 4 percent to 11.8 billion rupees in the quarter, but the cost of sales had
risen at a faster pace of 32 percent to 9.8 billion rupees, shrinking gross profits 48 percent to 2 billion rupees.

Distribution expenses grew 32 percent to 1.4 billion rupees, weighing on the net profit.

Tokyo Cement has an outstanding 180-day import credit payment of importation of raw materials &
finished goods for 3.8 billion rupees and 3.2 billion rupees respectively.

Sri Lanka imposed price controls on several essentials including imported cement due to a forex
shortage in the country.

Sri Lanka is facing severe foreign exchange shortages after interest rates were suppressed with excess money printing, creating foreign exchange shortages at a fixed price in the official market and depreciating the currency in the unofficial market.

Therefore price controls were imposed on imported essential items including cement.

In early October these controls were removed with Consumer Minister Lasantha Alagiywanna apologising
for creating shortages of essential goods amid rising global prices. (Colombo/Nov04/2021)

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