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Sri Lanka's Piramal Glass profits up 5.6-pct in 2012

Post Time:May 03,2013Classify:Company NewsView:376

Sri Lanka's Piramal Glass said profits rose 5.6 percent to 724.3 million rupees in the year to March 2012 from a year earlier, exports were doing well, but warned against higher energy costs this year.

The firm reported earnings of 76 cents per share for the year, in accounts filed with the Colombo Stock Exchange.

Revenues rose 5.8 percent to 5.5 billion rupees, expenses rose 7.9 percent to 3.95 billion rupees and gross profits rose 0.7 percent to 1.54 billion rupees from during the year.


It did not separately file quarterly accounts but based on third quarter accounts profits rose 7.2 percent to 105 million rupees in the March quarter from a year earlier.


Revenues dropped 2.2 percent to 1,406 million rupees in the March quarter from a year earlier, cost of sales dropped at a faster 3.1 percent to 1,001 million rupees allowing gross profits to remain mostly flat at 405 million rupees in the quarter.


The company said in a statement that export revenues rose 12 percent in the 2012 financial year while the domestic market had a value growth of 4.0 percent due to new products but volumes fell 10 percent from the previous financial year.


New bottles consumed in the liquor market had fallen due to the import of second hand bottles from India.


Chief executive Sanjay Tiwari said the imports for the liquor firms were "substandard, branded, used second hand bottles."


Re-using bottles however is generally considered to be an environmentally friendly practice that will reduce energy use, lower the so-called 'carbon footprint' of a country in addition to potentially reducing costs to the end consumer.


The company's exports had grown to 1.37 billion rupees in 2012 from 1.22 billion a year earlier, with Australia and New Zealand.


Tiwari said an increase of furnace oil costs by 80 percent in the early 2012 had hurt the firms operating profits.


"The furnace oil increase of 80 percent during the early part of the year had a hard impact on the company’s energy cost," he said.


"Glass manufacturing is a high energy intensive industry with over 40 percent of its cost being energy costs consisting of electricity, gas and furnace oil."


Tiwari said the latest power hike will also increase the company's energy bill.


"As requested earlier the Company has once again urged the Public Utilities Commission and the concerned government department to phase out the increase so that the burden can be absorbed by the Company and its valued customers over a period of time," he said.


Sri Lanka has a mechanism where power prices can be adjusted every six months but the process was stopped by political decision.


Prices were raised from 2012 after energy enterprises losses accommodated with central bank credit triggered a balance of payments crisis leading to a steep depreciation of the rupee against the dollar.


Many companies that spoke at a public hearing on power tariffs said prices should be adjusted on a road map which was known ahead of time.


Meanwhile Tiwari said he was confident of the potential of the company.


"Though the domestic environment and the market does not seem too exciting we are confident and hopeful that the seeds that we have planted in the international markets will bear harvest in the coming years, despite the domestic market downturn," he said.


Piramal Glass is to sell a part of its 21 acre land in Ratmalana to Prime Lands, a property firm for 355 million rupees before the end of the next quarter.


The funds will be used to repay high interest loans.

Source: http://www.lankabusinessonline.com/news/Sri_LankasAuthor: shangyi

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