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Sri Lanka Dipped Products June quarter profit down 43-pct

ECONOMYNEXT – Sri Lankan rubber gloves maker Dipped Products’ June 2015 quarter net profit fell 43 percent to 132 million rupees from a year ago as competition squeezed margins and low commodity prices caused losses in plantations.

Earnings per share fell to 2.20 rupees from 3.85 rupees over the period while sales fell 35 percent to 5.7 billion rupees, the Hayleys group subsidiary said in a stock exchange filing.

Tax costs fell 77 percent to 32 million rupees. A sharp downturn in plantations reduced profits, according to the firm, a big manufacturer of non-medical rubber gloves, which claims a five percent share of the global market.

The Hand Protection Sector contributed 196 million rupees in profits to the group’s profit before tax, a 38 percent dip from the same period in the last financial year.

“This was mainly on account of pressure on margins due to strong competition from the manufacturers in the region,” a statement said.

“The plantation sector is impacted by the downturn in global tea demand and resulted in a 20 million rupee loss during the quarter versus a profit of 126 million rupees in the previous financial year.”

Managing Director Mahesha Ranasoma said the group is continuously focusing on cost reduction in operations to defray pressure on margins.

“Our newly commissioned capacity for household gloves is now into commercial production and we are looking forward to enter into the industrial supported glove market in Q2 as we are now ready to commission our new industrial glove manufacturing factory, namely D P L Universal Gloves Limited at Biyagama Export Processing Zone.” (Colombo/August 7 2015)

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