Richard Pieris Group records Rs 808 mn profit

Borrowings reduce by Rs 1.7 bn:

The Richard Pieris Group recorded a turnover of Rs 6.3bn and an operating profit of Rs 808mn for the quarter ending December 31, 2009. The turnover for the nine months ending December 31, 2009 was Rs 16bn resulting in a Group operating profit of Rs 1.3bn and a profit after tax amounting to Rs 268m.

This is a significant turnaround when compared to the previous year where the Group reported a marginal profit after tax of Rs 15m excluding a capital gain of Rs 213m.

The reported results have fully absorbed a Rs 659m hit on account of gratuity provisioning (Rs 444m) and back-wages (Rs 215m) consequent on a wage increase in the Plantation Sector in September 2009. If not for this impact which had to be absorbed in September 2009, the Group would have recorded an Operating Profit amounting to Rs 1.9bn and a Profit after tax of Rs 927m for the nine months ended on December 31, 2009.

During the last nine months Group Debt levels reduced by Rs 1.7bn from Rs 6.9bn in April 2009 to Rs 5.2bn by end December 2009 with finance costs reducing to Rs 767m compared against Rs 1.09bn incurred in the corresponding period of the previous year.

The rubber sector recorded an operating profit of Rs 125m during the nine months ended December 31, 2009 compared to Rs 60m which was reported during the nine months ended 30th September, 2008.

This is a growth of 108 percent over last year.

During the quarter there was much focus on cost reduction and marketing which resulted in a turnaround in the latex-foam business.