Piramal Glass ends FY13 with 6% growth in turnover, net profit

Concluding yet another successful year and declaring its results for the year ended 31 March 2013, Piramal Glass Ceylon recorded continuous growth, which was established with the turnover being at Rs. 5.5 billion and the highest ever PAT being recorded at Rs.724 million.

The revenue, as well as the profit after tax grew by 6% over that of last year. The Board of Directors have declared a first and final dividend of 38% for the year ended 31 March 2013 as against that of 36% the previous year. The earnings per share too have increased by 6% to Rs 0.76 per share for the FY 13.  Revenue achieved for the year was Rs. 5,501 million as against Rs. 5,197 million of the previous year. The main contributor towards the revenue growth was the export market with a year on year growth of 12%.

The domestic market was able to sustain a value growth of 4% mainly due to the new products launched during the year. Yet the volumes in the domestic market showed a decline of 10% as against that of FY12. Piramal Glass CEO Sanjay Tiwari, attributed this decline due to the low consumption of new bottles in the liquor segment. “This is the outcome of the importation of cheap, substandard, branded, used second hand bottles from India to Sri Lanka for consumption in the Liquor segment.”

Tiwari said that their profitability was sustained mainly due to their export product portfolio. “The export revenue continued to grow for the fourth consecutive year. The company has achieved an export value of Rs. 1,370 million as against that of Rs. 1,225 million in FY12.

“The market reach established in the Australian and New Zealand markets last year has paid dividends during the year under review. The Company has also launched several new products in different shapes and colours in both the Domestic as well as International markets.”

The Operating profit during the year saw a dip of 2% from 30% in FY12 to 28% in FY13; Tiwari attributed this to the energy cost increase. “The furnace oil increase of 80% during the early part of the year had a hard impact on the company’s energy cost. Glass manufacturing is a high energy intensive industry with over 40% of its cost being energy costs consisting of electricity, gas and furnace oil.” Tiwari went on to say that the current electricity cost increase announced by CEB/Public Utilities Commission will have a substantial impact on Company’s energy bill.  “As requested earlier the Company has once again urged the Public Utilities Commission and the concerned Government department to phase out the increase so that the burden can be absorbed by the Company and its valued customers over a period of time.”

FY13 saw a marked increase in the interest rates in the country which further impacted the profitability. Yet the company was able to manage the situation to some extent due to the foreign currency loan portion in its loan portfolio. The company has been able to hold onto its profitability amidst these negative environmental conditions purely due to the high focus on productivity parameters. “The production efficiency increase it has achieved during the year proves this fact,” Tiwari said.  These production milestones were possible due to the high concentration the management has put on the Initiative of the manufacturing excellence program it has established in the plant. The glass manufacturing facility at Horana has already reached level two of manufacturing excellence with the target of reaching level three by the early part of the next financial year.