CGCL reports 10 percent PAT growth

GROWTH: Ceylon Glass Company Limited (CGCL) with the finalization of audited accounts report a growth of 19% in the top line over the previous year. The revenue for the year is Rs. 1,857 million as against previous years revenue of Rs. 1,555 m. Profit after Tax (before impairment) for the year was Rs. 188.40 m, representing a growth of 10%.

In the domestic market, CGCL achieved Sales growth of 15 % over the previous year. During this period, CGCL launched 7 new products, which were successfully commercialized.

This includes the new category of “Light Weight” one-way bottles, which is the current trend in the packaging industry. On the Exports front, CGCL registered growth of 212 % over previous year.

This growth is a reflection of the initial benefits realised by the company from its strategy of focusing on International market, along with increasing its product range in the domestic market.

The major contributor to this exports growth was the launch of different shades of coloured wine bottles.

The increased sales and volume of CGCL were achieved with the support of GGL - the parent company, who made major supplies to CGCL during FY 2007. GGL’s support was critical, as CGCL’s present capacity is near full utilization and its manufacturing operations are also nearing transition to the new location at Horana.

The increased supplies have helped CGCL gauge the potential market demand that it could cater to once its expanded production capacity comes on-stream at Horana.

Ceylon Glass is doubling its capacity for making coloured bottles in different shapes and sizes. It is setting-up a new production facility at Horana at a capital expenditure of over Rs. 2.5 billion.

After commissioning of the Horana facility, CGCL will be able to Export larger volumes of different coloured and shaped wine bottles in niche wine bottles market, in all major wine manufacturing countries.

Due to the impending commission of the Horana facilities, CGCL has had to book a non-cash flow expense of Rs. 84 Mn. as impairment cost, which resulted in the post tax profit reducing to Rs. 104 Mn.

This impairment has arisen due to relocation of the plant from the present location at Ratmalana to Horana and the resultant impact on accounting value of the Ratmalana furnace.

The company achieved a Profit after tax of Rs. 188 Mn (before one time impairment cost of Rs. 84 Mn) as against Rs. 177 Mn in FY 2006.

After the impairment charges, CGCL net profit for FY 2007 was Rs. 104 m.