Profits at Kelani Tyres rise 114 percent amid import curbs

COLOMBO: Profits at Kelani Tyres Plc, a Sri Lanka based tyre maker which has a joint venture with India’s CEAT s rose 114 percent to 194 million rupees in the June 2021 quarter from a year earlier, interim account cited by Economy Next showed.

The firm reported earnings of 2.28 rupees per share. The stock last traded at 82.20 rupees.

The joint venture firm’s sales in the group’s first quarter were 4,589 tonnes of tyres more than double from 2,262 tonnes in the similar quarter a year earlier amid import controls.

Sri Lanka imposed import controls after money printing by the central bank triggered foreign exchange shortages.

Total sales in the joint venture company jumped 122 percent to 3.4 billion rupees in the quarter from a year earlier, while export sales fell 4.1 percent to 142 million rupees. The costs also rose 106 percent.

Finance costs soared more than seven times to 32.3 million rupees from 3.7 million a year earlier.

Tyre imports are controlled under an import control law while rubber prices rose to record high earlier this year, encouraging producers.

The joint venture’s Sri Lanka-based CEAT Kelani Holdings raised radial tyre capacity by 16 percent to 600,000 a year to cater to strong demand due to import controls and forex shortages money printing created.