Piramal Glass Ceylon PLC has reported its results for the first half of the FY 2017-18 with a revenue of Rs. 3,082 million and Rs. 154 million as Profit After Tax as against Rs.3,129 million and PAT Rs. 73 million in the corresponding period of the previous year.
At 1H, the company’s domestic sales was lower by 15% at Rs. 2,184 million as against Rs. 2,586 million in the previous year while the export sales stood at Rs. 898 million as against Rs. 543 million the previous year, a growth of 65%.
Q2 – FY 2017-18: Sales during the second quarter of FY2017-18 totalled Rs. 1,679 million, a growth of 16%. when compared to the corresponding period of previous year.
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 and 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, 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 and upgradation, the furnace capacity was increased by 20% taking to account the expected domestic market growth and the potential export sales.
With the unforeseen drop in the domestic market the company is looking towards international shores to bridge the gap. 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 have not been addressed accordingly.