Higher tea prices boost glove maker Dipped Products 3Q

Dipped Products PLC reported a jump in earnings in its December quarter as the company’s non-medical gloves received an unprecedented fillip from its plantation business. 

The company reported Rs.3.30 a share or Rs.197.8 million for the December quarter (3Q18) from Rs.1.78 a share, an 85 percent leap.     

Dipped Products is one of the leading non-medical gloves manufacturers, which supplies 5.0 percent of the global share of the market, a company statement said.  

The company also manufactures general and industrial gloves and has factories in both Sri Lanka and Thailand. 

Besides the glove manufacturing, the group manages large-scale tea and rubber plantations. 

The financial performance was mainly supported by the group’s plantation business, which recovered strongly from the previous years’ dip due to higher than average prices fetched by teas at the auctions and also slightly better volumes. 

The consolidated revenue from the two business lines was Rs.6.79 billion for the quarter compared to Rs.6.2 billion recorded in the same period in 2016.

Meanwhile, for the nine months ended in December 31, 2017, the group earnings rose by 146 percent year-on-year (YoY) to Rs.209.5 million or Rs.3.50 a share from Rs.1.42 a share reported in the corresponding period last year. 

The group top line rose by 20 percent YoY to Rs.21.35 billion during the same period.  The hand protection segment contributed Rs.12.1 billion to the revenue, 11 percent higher than the previous year. 

Dipped Products Managing Director Dr. K.I.M .Ranasoma stated that the sector was able to grow its sales consistently across the highly competitive global markets by offering high quality products catering to customer specific needs. 

“However due to steep increase in latex prices the contribution to profit before tax from the segment dropped to Rs.200 million”, he added. 

This segment made an operating profit of Rs.705 million during the same period in 2016. 
Meanwhile, the group’s plantation business made an operating profit of Rs.678 million for the nine months compared to the Rs.140.3 million loss made during the same period last year. 

The plantation segment’s revenue rose to Rs.9.3 billion from Rs.7.0 billion during the same period last year. 

On December 31, 2017 Hayleys group held 42.12 percent stake in the company, followed by Employees Provident Fund with 12.76 percent.