Sri Lanka’s BPPL expects yarn orders to offset softer brush sales
ECONOMYNEXT – Sri Lanka’s BPPL Holdings Plc, a brush and yarn maker using recycled plastics said profits grew 24 percent in the September 2019 quarter to 201 million rupees, though it was seeing weakening export demand for brushes.
Chief Executive Anush Amerasinghe said there was ‘moderation’ of customer orders from clients in North America and Europe.
Revenue from the group’s new polyester yarn operations was not recognized in the quarter amid test production.
“..[W]e are close to being awarded large commercial orders, with yarn deliveries targeted for the Autumn/Winter2020 buying season, for which yarn production would commence in the third quarter of the current financial year,” Amerasinghe told shareholders.
“We are, therefore, reasonably confident that the general slowdown in brush revenue… will be more than compensated for by higher revenue from the recently expanded brush filament extrusion and the yarn operations in the quarters to follow.”
BPPL Holdings reported earnings of 34 cents per share for the quarter. In the six months to September BPPL Holdings reported earnings of 66 cents per share on total profits of 201 million rupees, which grew 24 percent.
Revenues grew 6.8 percent to 1.34 billion rupees in the September quarter from a year earlier, while cost of sales grew at a slower 1.8 percent to 464 million rupees, allowing gross profits to grow 6.4 percent to 233 million rupees.
Net finance costs grew from 1.8 million rupees to 4.7 million rupees.
In July a fire at BPPL’s brush unit had destroyed a warehouse and damaged a second. Raw materials, partially completed brushes, some machinery for making mops and finished brushes had been also destroyed.
Some machinery had been repaired. The firm had written off 144 million rupees of assets and claimed insurance for which progress payments were made.
The firm said it had received 100 million rupees in an advanced insurance payment.
In the September accounts, the write-offs were offset by claims. The claims are expected to be finalized by the end of the year, Amerasinghe said. (Colombo/Oct29/2019)