Piramal Glass Ceylon ends challenging year with revenue up, profit down

• Posts record turnover of Rs. 6.8 b in FY18; net profit down 29% to Rs. 344 m
• Exports soar by 77% to cross Rs. 2 b mark 
• Declares 18% dividend

Piramal Glass Ceylon PLC (PGC) completes yet another challenging year with a record turnover of Rs. 6.8 billion though profits were down to Rs. 344 million down from Rs. 485.4 million in FY17. 

“Whilst the turnover increase was marginal when compared to the previous year, it was the highest ever turnover recorded by the company,” the PGC said in a statement. Last year turnover was Rs. 6.78 billion.

The domestic revenue saw a dip of 16% to Rs. 4.59 billion in FY18. Beverage and Liquor segments were affected with the introduction of new taxes and levies while the Agro sale was affected due to the adverse weather conditions.

In the export segment, it was encouraging to note the Rs. 2 billion mark being crossed with a growth of 77%. 

The exports increased mainly in the US and Canadian markets with the company gaining entrance to several new markets which include Malaysia, Africa, Vietnam and Myanmar. The export to US has grown by over 150%, Australia by 72% and a six fold increase in the Canadian markets.

The Gross Profit for the year improved from Rs. 1.37 billion to Rs. 1.42 billion depicting a marginal increase in GP margins from 20% to 21%. Operating Profits increased from 11% to 13% from Rs. 779 million to Rs. 869 million.

These results were achieved despite the high impact of depreciation on the investments made during the year. The depreciation increased by 31% from Rs. 553 million to Rs. 722 million. The profitability was further affected by an increase in interest costs and high energy prices. The annualised impact of the interest on the long term loan of Rs. 3 billion taken for the relining and upgradation of the facility at Horana is reflected in the year under review. The interest cost was Rs. 328 million as against Rs. 176 million of the previous year. 

The impact of high furnace oil prices and fluctuating LPG prices continued during the period under review. 

Despite the dip in profit, following the consistent policy of a 50% payout ratio, the Board of Directors of Piramal Glass Ceylon has proposed a dividend of 18%.