Piramal Glass Ceylon PLC has announced its results for the 1st Quarter of FY 2017-18 with Rs. 1,403 million of Revenue & Rs. 105 million of Profit After Tax showing a marginal decline when compared with the profitability of FY 2016-17 1st Quarter.
The sale during the 1st three months of FY2017-18 was Rs. 1,403 million, which reflects a de-growth of was 17% when compared to the similar period of previous year
The Domestic sale stood at Rs. 1,084 million as against Rs. 1,346 Million of the similar quarter of the previous year, reflecting a de-growth of 19%. A dip in the overall domestic market was experienced which impacted the sales in all segments.
The Export sales for the quarter was at Rs. 319 million as against the Rs. 338 million received in the similar quarter of the previous year.
The major decline in the export market was from export to India due to the changes in the tax structure with the announcement of GST implementation country wide. All other Geographical locations namely Australia, USA & Canada have showed positive growth figures during the period under review.
Amidst the adverse sales impact the company showed marked improvement in its profitability indicators. The Gross Profit during the quarter under review was 25% as compared to 18% in the similar quarter whilst the operating profit moved up to 15% from 9% 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 thru imports.
Even though the operating profit has increased The Profit After Tax was subdued & PBT was effected due to the high interest cost resulting from the Long Term Loan of Rs. 3Billion borrowed for the funding of the project.
The operations during the quarter were impacted by the heavy floods which occurred during the latter part of May.
Though the company premises itself was not affected but access roads went under water hampering transportation of Raw Material & Energy & the despatch of bottles. Several customers’ premises & operations were also affected due to the floods which resulted in the off take and consumption of bottles.
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$50 since last four years and as at date is more than 50% reduction in the prices.
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.