Piramal Glass Sri Lanka unit December profit down 52-pct
ECONOMYNEXT – Piramal Glass Ceylon PLC said net profit fell 52% to Rs97 million in the December 2017 quarter from a year ago as demand in the food, beverage and liquor markets was yet to recover from a slowdown.
Total sales growth of the firm, a unit of India’s Piramal Glass, was virtually flat at Rs1.98 billion over the same period, according to interim results filed with the stock exchange.
Quarterly earnings per share were 10 cents. Piramal Glass Ceylon’s share last traded at Rs6 Wednesday.
EPS in the nine months to 31 December 2017 was 26 cents with net profit down nine percent to Rs251 million while sales remained flat at Rs5 billion.
Domestic sales for the December 2017 quarter fell 20% to Rs. 1,256 million from the previous year, a company statement said.
“The dip felt in the overall domestic market since beginning of the year did not recover during the quarter under review,” it said.
“Due to the increase in levies and taxes, the final products are becoming more expensive. This results in a decline in consumer demand which ultimately reflects in the reduction of sales in the food, beverage and liquor segment.
“Added to this , the impact of extreme weather conditions impacted the sales in Virgin Coconut Oil and the agro chemical segment.”
Piramal Glass Ceylon’s management has tried its best to channel the extra capacity towards the export market to bridge the gap due to the loss of domestic volumes, with exports shooting up 75% to Rs. 729 million.
“Sales to USA, Canada, Australia and neighbouring markets showed an exceptional increase which partly helped to shorten the gap,” the statement said.
“PGC is focussing to develop these potential markets to contract the incremental capacity added in the year 2016/17.”
The company said margins improved as it had reduced imports of bottles from India which it resorted to when the furnace was shut down for a capacity expansion, but higher finance costs on borrowings had restrained profit growth.
(COLOMBO, February 15, 2018)