# CEYLON GRAIN ELEVATORS PLC Financial Summary

Canonical URL: https://pal.lk/updates/gran-financial-summary
Symbol: GRAN.N0000
Company: CEYLON GRAIN ELEVATORS PLC
Sector: Food, Beverage & Tobacco
Published: 2026-07-31T16:22:25Z
Last updated: 2026-07-31T16:22:25Z

# CEYLON GRAIN ELEVATORS PLC Financial Summary and Investment Analysis

## Executive Overview
CEYLON GRAIN ELEVATORS PLC is Sri Lanka’s largest integrated poultry industry operator, functioning across the entire value chain—from feed milling and commercial farming to poultry processing, packaging, and the distribution of equipment, vaccines, and drugs. The company operates under the well-recognised "Prima" and "Farmers' Choice" brands. The provided reports illustrate a highly resilient and growing operation that successfully capitalized on market recovery, rising demand for protein, and cost optimization. The company boasts zero debt, substantial cash reserves, and is currently executing major capacity expansions to solidify its market leadership.

**Key periods covered:** CY 2023, CY 2024, CY 2025, and Q1 to Q2 2026 (Half-year ended 30 June 2026).

## Financial Performance
### Revenue and Profitability Trends

| Period | Revenue (Rs. Mn) | Gross Profit (Rs. Mn) | Net Profit (Rs. Mn) | GP Margin | NP Margin |
|--------|------------------|-----------------------|---------------------|-----------|-----------|
| **CY 2024** | 23,993.3 | 4,142.6 | 3,144.9 | 17.27% | 13.11% |
| **CY 2025** | 29,767.4 | 6,418.7 | 4,119.6 | 21.56% | 13.84% |
| **H1 2025** | 14,658.9 | 2,552.0 | 1,662.7 | 17.41% | 11.34% |
| **H1 2026** | 15,925.8 | 3,311.1 | 2,211.1 | 20.79% | 13.88% |

**Analysis:**
*   **Revenue Growth:** Revenue surged by 24.1% YoY in CY 2025 and continued its upward trajectory with a 9% YoY increase in H1 2026. This was primarily driven by higher sales volumes in processed chicken and broiler Day-Old Chicks (DOCs), supported by robust demand and a recovery in tourism.
*   **Profitability Surge:** Net profit increased by 31% in CY 2025 and 33% YoY in H1 2026. Gross profit margins expanded significantly from 17.27% in CY 2024 to 21.56% in CY 2025, benefiting from the advantages of compounded feed yield, strategic price adjustments, economies of scale, and efficient cost management.
*   **Segment Dynamics:** The Milling and Farming segment is the core contributor, generating 79% of group revenue in CY 2025. However, in H1 2026, feed segment revenue experienced a marginal decline due to farmers shifting to self-mixed feed driven by the availability of cheaper local raw materials. This was counterbalanced by very strong demand and pricing in the processed chicken and DOC segments.

## Balance Sheet Analysis

| Indicator (Rs. Mn) | As at 31 Dec 2024 | As at 31 Dec 2025 | As at 30 Jun 2026 |
|--------------------|-------------------|-------------------|-------------------|
| **Total Assets** | 23,105.3 | 25,886.8 | 27,162.3 |
| **Total Liabilities** | 7,521.9 | 6,986.4 | 7,353.8 |
| **Total Equity** | 15,583.4 | 18,900.4 | 19,808.5 |
| **Cash & Equivalents** | 1,945.7 | 11,600.7 | 12,055.8 |
| **Total Debt** | 0.0 | 0.0 | 0.0 |

**Analysis:**
*   **Liquidity:** The company holds an extraordinarily strong liquidity position. Cash and cash equivalents skyrocketed from Rs. 1,945.7 Mn in CY 2024 to Rs. 12,055.8 Mn by H1 2026. The current ratio improved from 3.08 in CY 2024 to 3.88 in CY 2025, highlighting an exceptional ability to cover short-term liabilities.
*   **Solvency:** CEYLON GRAIN ELEVATORS PLC operates with zero interest-bearing bank borrowings (other than minor lease liabilities), resulting in a pristine balance sheet that is highly insulated against interest rate shocks.
*   **Equity Growth:** Retained earnings grew substantially due to strong profitability, driving total equity up by over 27% from CY 2024 to H1 2026.

## Cash Flow Analysis

| Period | Net Cash from Operations (Rs. Mn) | Net Cash from Investing (Rs. Mn) | Net Cash from Financing (Rs. Mn) |
|--------|-----------------------------------|----------------------------------|----------------------------------|
| **CY 2024** | 7,111.8 | (1,170.1) | (11,393.2) |
| **CY 2025** | 3,113.9 | (1,457.4) | 7,998.5 |
| **H1 2026** | 1,426.5 | (719.3) | (252.1) |

**Analysis:**
*   **Operating Cash Flow:** Remained positive, though lower in CY 2025 compared to CY 2024, primarily due to increased working capital requirements (inventory buildup to manage supply chain risks).
*   **Investing Cash Flow:** Increased outflows correspond to strategic capital expenditures, notably the ongoing Rs. 3.0 Bn expansion of the chicken processing plant and the Rs. 550 Mn investment in the Grandparent (GP) farm.
*   **Financing Cash Flow:** The massive outflow in CY 2024 and subsequent inflow in CY 2025 reflect the active management of short-term investments and dividend payments (Rs. 15.00 per share paid for CY 2025).

## Key Financial Ratios and Growth Indicators

| Metric | CY 2024 | CY 2025 | H1 2026 (Annualized/Spot) |
|--------|---------|---------|---------------------------|
| **Earnings Per Share (EPS) (Rs.)** | 40.28 | 57.68 | 30.25 (Half-year) |
| **Net Asset Value (NAV) per Share (Rs.)** | 197.31 | 246.67 | 261.92 |
| **Return on Equity (ROE)** | 20.90% | 23.89% | N/A |
| **Dividend Payout Ratio** | 74.58% | 30.33% | N/A |

*   **Growth:** The company demonstrated a 24% YoY revenue growth in CY 2025, and a 43% jump in EPS, reflecting strong operational leverage and margin expansion.
*   **Operational Efficiency:** Replaced significant manual labor dependencies with advanced automation at the Seeduwa plant. Asset turnover ratio stood at a healthy 1.22 in CY 2025.

## Economic and Market Context
*   **Macro Environment:** Sri Lanka’s economy stabilized in CY 2025 with an estimated GDP growth of 5.0%, bolstered by tourism and foreign remittances. Inflation remained contained.
*   **Currency & Costs:** The depreciation of the Sri Lankan Rupee increased the cost of imported raw materials (maize, soybean). Domestic maize production improved by 21.7% but remained insufficient, necessitating a 24.8% increase in imports.
*   **Industry Dynamics:** A supply glut early in CY 2025 pressured prices, but limited availability and high costs of substitute proteins (beef, pork, fish) drove a strong recovery in poultry demand. The layer DOC segment faced headwinds due to volatility and oversupply in the table egg market.

## Future Potential and Outlook
*   **Capacity Expansion:** Management is executing a Rs. 3.0 Bn investment to expand the state-of-the-art chicken processing plant in Seeduwa, which will broaden the value-added product portfolio and increase yield efficiency through automation. 
*   **Breeder Operations:** A Rs. 550 Mn investment in a modern Grandparent farm will secure local commercial DOC supply, mitigating import dependencies.
*   **Sustainability & ESG:** The company is aggressively pursuing decarbonization, installing solar decks (Rs. 42 Mn invested), converting open bird houses to Environmentally Controlled (EC) houses (Rs. 215 Mn invested), and fully aligning with SLFRS S1 and S2 standards.

## Risks and Challenges
*   **Raw Material Volatility:** High dependence on imported feed ingredients (56% of cost of sales in CY 2025) exposes the company to global commodity price shocks and forex risks.
*   **Market Shifts:** A recent shift by farmers toward self-mixed feed threatens the company's compounded feed volumes.
*   **Biological Risks:** As a livestock operator, the company faces inherent risks of disease outbreaks, heat stress, and mortality, mitigated by strict biosecurity, EC housing, and Halal/FSSC 22000 certifications.

## Shareholder and Corporate Information
*   **Major Shareholder:** Prima Limited, Singapore retains a 45.45% stake, providing strong parent-company backing, technical expertise, and governance alignment.
*   **Public Holding:** The public float stands at 54.54% across 5,178 shareholders as of June 2026.
*   **Stock Performance:** The share price demonstrated remarkable growth, closing at Rs. 400.00 at the end of CY 2025 (up from Rs. 189.50 in CY 2024), and further appreciating to Rs. 484.00 by 30 June 2026.

## Investment Decision Indicators

**Strengths & Opportunities (Bullish Indicators):**
*   **Pristine Balance Sheet:** Zero debt and Rs. 12+ Bn in cash provide massive downside protection and dry powder for expansion or high dividend payouts.
*   **Margin Expansion:** Despite cost pressures, GP margins expanded by over 400 basis points in CY 2025, proving pricing power and operational efficiency.
*   **Vertical Integration:** Complete control from feed to processing insulates the company from isolated supply chain shocks.
*   **Strategic Capex:** Heavy investments in automation and value-added processed meats align perfectly with shifting consumer preferences and higher-margin retail channels.

**Weaknesses & Threats (Bearish Indicators):**
*   **Input Vulnerability:** Vulnerable to global grain prices, freight costs, and the Sri Lankan Rupee exchange rate. 
*   **Demand Substitution:** The Q2 2026 report specifically notes a marginal decline in feed revenue due to farmers switching to self-mixed feed, presenting a threat to the core volume driver.
*   **Climatic Sensitivity:** Extreme weather directly impacts mortality rates and feed conversion ratios, requiring continuous defensive capex (e.g., EC houses).

**Overall Assessment Rationale:**
*   **Rationale for a BUY:** Investors prioritizing financially robust, market-leading companies with high cash reserves, zero debt, and expanding margins would find the stock highly attractive. The ongoing shift toward high-margin processed foods and heavy automation capex provide a clear runway for future earnings growth.
*   **Rationale for a HOLD:** Investors concerned about the recent downtrend in commercial feed volumes (due to self-mixing trends) and the inherent cyclicality/volatility of agricultural commodities might wait to see if the new processing capacity fully offsets feed segment stagnation before increasing exposure.
*   **Rationale for a SELL:** Those with a low tolerance for forex risks, global grain price volatility, or the fundamental biological risks inherent in livestock farming may look to exit, especially considering the massive run-up in the share price (from Rs. 189.50 to Rs. 484.00) over the reporting periods, potentially indicating that much of the upside is already priced in.