1st Half FY-2017-18: Piramal Glass Ceylon PLC has reported its results for the 1st Half of the year FY 2017-18 with Rs. 3,082 million of Revenue & Rs. 154 million of Profit After Tax as against the previous year similar period revenue of Rs.3,129 million & PAT of Rs. 73 million.
At half year the company domestic sale was lower by 15% at Rs. 2,184 million as against Rs. 2,586 million of previous year whilst the Export sales stood at Rs. 898 million as against Rs. 543 million of previous year with reflecting a growth of 65%.
Q2 – FY 2017-18 : The sale during the 2nd Quarter of FY2017-18 was Rs. 1,679 million, which reflects a growth of 16% when compared to the corresponding period of previous year figure of Rs. 1,445 million.
The Domestic sale stood at Rs. 1,100 million as against Rs. 1,239 Million of the similar quarter of the previous year, reflecting a de-growth of 11%. A dip in the overall domestic market was experienced which impacted the sales mainly in the food & beverage segments.
The management made special efforts to expand in the export market to offset the domestic setback. Thus the high growth seen in the export market is a outcome of the initiatives proactively converted to sales in the newer markets. PGC has demonstrated its capability by achieving export sales for the quarter of Rs. 579 million as against the Rs. 206 million received in the similar quarter of the previous year which depicted a growth of 181%.
Amidst the adverse sales impact the company showed improvement in its profitability indicators. The gross profit has risen to 21% during the quarter under review as compared to the previous year similar quarter of 7%. During the 1st half of the year the gross profit was 23% as compared to 13% in the similar period of the previous year whilst the operating profit moved up to 14% from 4% of the previous year.
The incremental operational profit margin improvement was possible due to the reduction of trading sales. With the new facility now well stabilised the domestic market is being supplied mainly with in house manufactured bottles which has replaced the imported bottles. Last year due to capacity constraints a considerable portion of the domestic sale was done through imports.
PGC completed its relining and expansion project during previous year with an investment of over Rs 3 Billion. During the relining & upgradation, the furnace capacity was increased by 20% taking to account the expected domestic market growth & the potential export sales.
With the unforeseen drop in the domestic market the company is looking towards international shores to bridge the gap. The sale to USA, Canada and Australia showed exceptional increase which partly helped to shorten the gap. PGC is focussing to develop these potential market to liquidate the additional capacity.
PGC also commenced export trading business to Myanmar which opened up a new dimension of international business for the company. This helps PGC to offer its international customer a total range of bottles.
The cost of production during the period remained under pressure due to higher LPG prices, input raw materials and ever increasing international packing material prices.
Further it is a very much a concern to note that the Ceylon Petroleum Corporation has not revised the rates of Furnace oil for past four years. The crude oil prices which hit a US$ 120 a barrel in 2011 is now hovering below US$60 since last four years. Yet the corresponding Furnace oil prices has not been addressed accordingly. This state of affairs is affecting our competitiveness in the international market. The company has been requesting the government to introduce a formulae pricing based on international crude oil price which will be a fair transparent pricing mechanism.