True P&L Deep Dive: Ceylon Cold Stores (CCS) - Operational Brilliance vs. Strategic Recklessness

Welcome to another episode of the True P&L Deep Dive. Today, we are stripping back the accounting noise to reveal the operational reality of Ceylon Cold Stores (CCS) for the first half of the 2025/2026 financial year.

On the surface, the top-line numbers look spectacular with double-digit revenue growth. But when you scroll down to the bottom line, the growth vanishes. In this analysis, we uncover exactly where the money is going and why this might be a classic case of "Profitless Prosperity."

🔍 In this breakdown:

The Growth Paradox: How CCS achieved a 16% revenue surge but only a 1% increase in net profit to equity holders.

The 1 Billion Rupee Black Hole: We identify the specific line item in "unallocated corporate costs" that wiped out over LKR 1 billion in operational gains.

Cash is King: Why the company's cash conversion is an eye-watering 277%, and how they are generating cash faster than profit.

The Liquidity Trap: An honest look at the dangerous 0.29 Quick Ratio and the heavy reliance on supplier credit and bank overdrafts.

The Dividend Dilemma: Why paying out 135% of earnings in dividends while eroding Net Asset Value (NAV) is a red flag for long-term investors.

We weigh the operational excellence of the supermarkets and factories against the strategic risks taken by the head office. Is CCS a cash machine or a capital trap? Let's find out.

📉 Key Metrics Analyzed:

Revenue: +16%

Net Profit: +1%

Operating Cash Flow: LKR 6.77 Billion

Unallocated Corporate Costs: + LKR 1.08 Billion

Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always do your own research.

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