BPPL Holdings records stellar 85% growth in QoQ net earnings in Q2 ‘24

Thursday, 14 November 2024 01:51 - - {{hitsCtrl.values.hits}}

Managing Director/CEO Dr. Anush Amarasinghe

BPPL Holdings PLC said yesterday it witnessed a significant improvement in its financial performance during the three months ended 30 September 2024, as compared to both the corresponding quarter in FY2023/24 and the three months ended 30 June 2024.

The increase in revenue and gross margins was despite an appreciation in Sri Lankan Rupee rates used to convert US Dollar-denominated sales to Sri Lankan Rupees.

Consolidated revenue for the three months until 30 September 2024 was Rs. 1.6 billion, a growth of 5% in Rupee terms and 11% in US Dollar terms over the same period in the previous year. EBITDA for the period was Rs. 356 million compared to Rs. 233 million in the corresponding period the previous year, a growth of 53%. Net earnings after tax were up 85% to Rs. 184 million, compared to Rs. 99 million in the previous year.

However, a charge of Rs. 99 million was recorded in the previous year, due to the net loss on conversion of foreign currency-denominated assets and liabilities, as opposed to a gain of Rs. 43 million in the current year.

The revenue of Rs. 1.6 billion for the quarter under review is an increase of 15% from that of the previous first quarter, mirroring the growth in brush sales as well as recycled polyester yarn. Resultantly, EBITDA grew by 104% QoQ, due to higher revenue and gross margins during the quarter, and net earnings by over 100%, compared with a loss of Rs. 19 million.

The increase in group revenue is due to an improvement in the operating environment in the brush segment, as well as higher-than-industry-average growth in the yarn segment. As enumerated in a review of the previous quarter, an improvement was anticipated in the operating environment, particularly in the brush segment, as customers started replenishing their inventories built up during the preceding period, and due to new customer acquisitions.

The overall improvement in EBITDA during the quarter under review was the outcome of improved gross margins arising from higher volumes and savings in utility costs. Several internal initiatives are also underway towards improving gross margins across its business segments, the benefits of which will be seen over the forthcoming quarters.

“We expect the momentum in the brush segment to remain over the next two quarters of the current financial year due to new customer acquisitions and product development, though the sustenance of this trend over the medium term would depend on an overall improvement to global economic sentiment and further easing of interest rates, particularly in the US,” BPPL Holdings PLC Managing Director/CEO Dr. Anush Amarasinghe said.

“The operating environment for recycled polyester yarn remains challenging given the competitive prices of imported yarn, possibly due to Government subsidies in sourcing countries. The company aims to diversify the customer segments it serves in this segment by exploring sales for other uses through value addition over the medium term,” he added.