PGC topline up 14% in 1H of FY19

Wednesday, 31 October 2018 09:31 - - {{hitsCtrl.values.hits}}

Piramal Glass Ceylon PLC has reported its results for the first half of the year FY 2018-19 with Rs. 3,586 million of revenue and Rs. 38 million of Profit After Tax as against the similar period of the previous year which was Rs. 3,082 million and PAT of Rs. 154 million.

At half year the Company’s domestic sale was lower by 3% at Rs. 2,136 million as against Rs. 2,184 million of the previous year, whilst the export sales stood at Rs. 1,390 million as against Rs. 898 million of the previous year, reflecting a growth of 55%.

The sales during the 2nd quarter of FY2018-19 was Rs. 1,878 million, which reflects a growth of 12% when compared to the corresponding period of the previous year’s figure Rs. 1,679 million.

The domestic sale stood almost at par with that of the previous year’s similar quarter at Rs. 1,121 million as against Rs. 1,100 million.

The management of PGC made special efforts to expand their sales in the export market in a bid to offset the domestic setback. Thus the high growth seen in the export market is the 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. 757 million as against the Rs. 579 million received in the similar quarter of the previous year which depicts a growth of 31%. The export volumes to Canada, USA, Vietnam and India took the lead amongst the increased export sales.

Whilst during the quarter the company ensured a top line growth of 12%, gross profit margins fell from 21% to 10% with the quarter ending at a loss of Rs. 8.5 million as against the profit of Rs. 49 million in the previous year similar quarter. The gross profit during the period under review was severely impacted by the fuel increase which in turn has directly impacted the prices of raw materials, packing material and transportation costs. The margins further declined due to the increase in LPG costs by 35% and furnace oil increase by 15%. The published results are only partly impacted by this, with the full impact being yet to be felt in the future quarters. In this situation, the Company has been compelled to pass on part of the inflation to the second half of the current financial year.

The change in consumer demand trends have also impacted the gross profit. Due to the increase in levies and taxes, the final products are becoming more expensive. This has resulted in the consumer shifting towards smaller pack sizes.

With this in mind the company is in the process of investing in a new bottle production line which would enable the additional downstream equipment capacity to increase the production quantity of smaller bottles.