Financial Times

Oil palm cultivation in Indonesia to expand

Carson Cumberbatch and Company Ltd. plans to expand oil palm cultivation in Indonesia where its estates made a significant contribution to boosting the firm's pre-tax profits, which soared 155 percent to Rs1.9 billion last year.

The bull run on the Colombo Stock Exchange last year also contributed to increasing the company's profits through capital gains on share trading and dividend income which benefited the group's investment sector.

However, the brewery business did not perform as well as it should because of restrictions on beer sales but the company said in a statement its investment in the Sathosa retail chain is expected to expand retail sales. Earnings per share for the year soared 405 percent to Rs. 991 from Rs 195.27 the year before.

The market value of an ordinary share has risen sharply to Rs 11,800 this year compared to Rs 1,605.25 as at March 31, 2003. Carsons reported that 35 percent of consolidated profit before tax for the year ended March 31, 2004 came from the group's operations in Indonesia and Malaysia.

Consolidated profit after tax of the group, which is in the oil palm plantations, brewery and investment sectors, increased 172 percent to Rs.1.7 billion. Group turnover for the year was up 48 percent to Rs.5.9 billion.

Carsons chairman Tilak de Zoysa told shareholders in his annual report that oil palm is seen as a key growth area in the future and that it was considering expanding its plantations in Indonesia.

"With the progressive maturing of its 16,000 ha plantation in Central Kalimantan, Indonesia, the overseas oil palm plantations sector became one of the highest contributors to group results during the year," the Carsons statement said. "This performance was supported by favourable prices for palm oil in world markets."

The company reported spending Rs. 762 million on capital expenditure in its oil palm plantations. Investments in the brewery sector amounted to Rs. 192 million.

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