Dipped Products posts PBT of Rs 2.38 billion
Revenue up 33% to Rs 19.8 billion:
Strong operational performances from hand protection combined with
capital gains and better contributions from plantations have generated
healthy revenue and profit growth for Dipped Products PLC (DPL) in the
year ending 31st March 2012.
The Hayleys Group's globally-ranked rubber glove manufacturing
business has reported turnover growth of 33 per cent to Rs 19.8 billion
and profit before tax of Rs 2.38 billion inclusive of capital gains of
Rs 1.14 billion, achieving three-fold growth over the previous year's
pre-tax profit of Rs 748 million.
The hand protection sector's contribution to profit before tax
increased from Rs 374 million to Rs 728 million excluding capital gains,
while Plantations increased its contribution to Rs 515 million from a
profit of Rs 374 million in the previous year.
The profit attributable to equity holders of the company improved to
Rs 1.87 billion. Basic earnings per ordinary share for the year totaled
Rs 31.18, versus Rs 7.46 for 2010-11.
Commenting on these results, Dipped Products and Hayleys PLC Chairman
Mohan Pandithage said: “DPL's performance has demonstrated its
underlying capability to generate sustainable business growth by
delivering a profit before tax exceeding Rs 1 billion, excluding capital
gains. This is a significant milestone for DPL in a year during which
traditional markets in the Eurozone and America were battling a
slow-down in their economies.”
He said a “cooling off” of rubber prices in the year reviewed in
comparison with the unprecedented increases of 2010-11 had helped DPL's
Sri Lankan glove manufacturing operations to improve on the deteriorated
margins of the previous year, thereby contributing significantly to the
better performance of the business. “The plantation sector registered
significantly better profitability mainly due to its rubber business,”
Pandithage said. The dominant contributor in the Plantation sector was
Kelani Valley Plantations PLC (KVPL). DPL's second plantation company
Talawakelle Tea Estates PLC (TTEL) contributed negatively to the
sector's profit due to low tea prices. “Both plantation companies were
affected by the worker wage increase that became effective in April
2011,” Pandithage added.
Dipped Products Managing Director Dr. Mahesha Ranasoma said the year
under review comprised a “good” first three quarters and a challenging
fourth quarter.
“By the last quarter of the year, rubber prices bottomed out and
commenced an upward trend. The last quarter also saw rapid increases in
fuel and electricity costs which when combined exerted severe pressure
once more on margins,” he said. “This was further exacerbated by the
fact that our traditional markets in the Eurozone and America were
slowing down, which directly and indirectly affect our business growth
and profitability: it seemed that low cost products were once again
gaining ground in these markets against the higher quality gloves
manufactured by DPL.”
Reporting on DPL's overseas subsidiaries, Dr. Ranasoma said Dipped
Products Thailand (DPTL), the Group's medical glove manufacturing
operation, increased turnover by 14 per cent to Rs 2.3 billion but
posted a loss of Rs 112 million due to a drop in margins and shift in
demand for synthetic gloves. |