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Apr 25, 2014 (LBO) - Sri Lanka's Piramal Glass Ceylon Plc, said profits fell 41 percent to 62 million rupees in the March 2014 quarter from a year earlier amid a drop in domestic demand, but the firm was growing its export volumes.
The firm reported earnings of 7 cents per share for the quarter. For the full year to March, profits were 835 million rupees or 88 cents per share helped by a 652 million rupees gain on a land sale.
In the March quarter revenues rose 0.81 percent to 1355.8 million rupees but cost of production rose at a faster 19.8 percent to 1,170 million rupees, shrinking gross profits 49 percent to 185 million rupees.
In the full year revenues fell 5 percent to 5.2 billion rupees from 5.5 billion rupees a year earlier, cost of production rose to 4.4 billion rupees from 3.9 billion rupees and gross profit fell to 805 million rupees from 1.56 billion rupees.
The firm said domestic sales fell 9 percent to 3,774 million rupees and export sales grew 6 percent to 1,446 million rupees.
Piramal Glass said demand for beer and beverages dropped by almost 10,000 tonnes of glass bottles and other segments were also static.
"Though the glass bottles are eco friendly and reusable most of Piramal’s customers have experienced and observed a shift in trend from glass bottles to other forms of packaging which in the longer run may not be sustainable," the firm said.
"To manage this temporary demand drop, the Company had to choose between the option of reducing its production or to shift the market base to the export segment."
The firm had grown export volumes 28 percent, catering to the mass market product which was not as profitable as niche markets exports of the previous year. The firm had taken a price reduction after the Indian rupee weakened.
Sales to Australia had grown 125 percent and the reliance on India was down to 65 percent from 76 percent. The firm had to face stringent and time consuming approval process to gain entry to the Australian market.
Production also fell 20 percent with repairs to its plant in Horana, but it was now operating at full capacity.
Operating costs were up along with an electricity price hike in 2013 but the firm had not raised prices due to weak demand.
"However we would be compelled to share part of this inflation with our customers during the FY (financial year) 2015," chief executive Sanjay Tiwari said.
"the domestic environment does not seem to be too promising, PGC is confident and hopeful that the Company would see better results in the coming year with the in-roads that we have made in the international markets and the strategic initiatives taken in the domestic market."
http://www.lankabusinessonline.com/news/sri-lankas-piramal-glass-in-export-push-as-domestic-sales-drop/475028246
The firm reported earnings of 7 cents per share for the quarter. For the full year to March, profits were 835 million rupees or 88 cents per share helped by a 652 million rupees gain on a land sale.
In the March quarter revenues rose 0.81 percent to 1355.8 million rupees but cost of production rose at a faster 19.8 percent to 1,170 million rupees, shrinking gross profits 49 percent to 185 million rupees.
In the full year revenues fell 5 percent to 5.2 billion rupees from 5.5 billion rupees a year earlier, cost of production rose to 4.4 billion rupees from 3.9 billion rupees and gross profit fell to 805 million rupees from 1.56 billion rupees.
The firm said domestic sales fell 9 percent to 3,774 million rupees and export sales grew 6 percent to 1,446 million rupees.
Piramal Glass said demand for beer and beverages dropped by almost 10,000 tonnes of glass bottles and other segments were also static.
"Though the glass bottles are eco friendly and reusable most of Piramal’s customers have experienced and observed a shift in trend from glass bottles to other forms of packaging which in the longer run may not be sustainable," the firm said.
"To manage this temporary demand drop, the Company had to choose between the option of reducing its production or to shift the market base to the export segment."
The firm had grown export volumes 28 percent, catering to the mass market product which was not as profitable as niche markets exports of the previous year. The firm had taken a price reduction after the Indian rupee weakened.
Sales to Australia had grown 125 percent and the reliance on India was down to 65 percent from 76 percent. The firm had to face stringent and time consuming approval process to gain entry to the Australian market.
Production also fell 20 percent with repairs to its plant in Horana, but it was now operating at full capacity.
Operating costs were up along with an electricity price hike in 2013 but the firm had not raised prices due to weak demand.
"However we would be compelled to share part of this inflation with our customers during the FY (financial year) 2015," chief executive Sanjay Tiwari said.
"the domestic environment does not seem to be too promising, PGC is confident and hopeful that the Company would see better results in the coming year with the in-roads that we have made in the international markets and the strategic initiatives taken in the domestic market."
http://www.lankabusinessonline.com/news/sri-lankas-piramal-glass-in-export-push-as-domestic-sales-drop/475028246
