Piramal Glass posts Rs 86m PBT | Sunday Observer

Piramal Glass posts Rs 86m PBT

The Piramal Glass team
The Piramal Glass team

Piramal Glass Ceylon PLC has released its results for the first quarter of FY 2018-19 with Rs.1,649 million revenue and Rs. 86 million profit before tax.

The increase in revenue reflects a growth of 17.5% when compared to the similar period in previous year.

Domestic sales stood at Rs.1,016 million as against Rs.1,084 million in the similar quarter of the previous year. The decline has continued in the domestic market for the second consecutive year.

The major impact was the liquor segment. Over the past two years a shift in consumption was observed from the high end locally filled foreign liquor segment to the low end liquor. This was further aggravated by heavy taxes imposed on the liquor industry.

The high end liquor segment uses new bottles while the low end uses the used scrapped bottles. This shift has impacted the demand of fresh bottles.

The company has entered into the retail segment with the launch of glass bottles. Several innovative designs and options are now available for household consumption.

This has opened an avenue for a new category of business. This venture is to support the worldwide green initiative of protecting the environment by providing alternatives to plastics and PET.

Export sales for the quarter grew by 98% to Rs. 633 million as against Rs. 319 million in the similar quarter. This is 39% of the overall sales value as against 23% in the previous year 1st quarter.

The company did its best to fill the excess capacity created with the decline in the domestic market thru exports. Most of the orders obtained at short notice from the mass market as capacity fillers did not yield the same attractive margins as the domestic and high niche segment of the exports. The company continuously strives towards gradually shifting the volumes from the mass market to the premium segment.

Presently company exports to USA, Canada, New Zealand, Australia, India, Pakistan and Myanmar. A significant growth has been experienced in the USA and Canadian markets.

Gross profit for the period under review is Rs. 286 mn as against Rs. 351 mn in the corresponding period previous year. Product mix being a reason for low margins the other factors were energy costs and other input cost increases.

The final phase of the capacity expansion project is likely to be completed with the installation of the 6th production line, by the end of the current financial year. The total additional investment for this project will be Rs. 1bn. This investment will facilitate the company to utilise its installed capacity to maximum.

With the installation of 3MW rooftop solar power plant which is the largest single location installation in the country, the company is further exploring various alternatives to bring down the energy cost which is the major cost component in glass manufacture.