21 Oct 2022 - {{hitsCtrl.values.hits}}
PGP Glass Ceylon PLC reported some solid top and bottom line performance in the three months ended in September amid myriad macro-economic challenges and supply chain problems although the industrial juggernaut was seen contending with soaring cost inflation at operational level.
Releasing its interim results among the first batch of earnings reports this week, the company reported revenues of Rs.4.95 billion in the July - September quarter, compared to Rs.2.26 billion in the same period in 2021, logging a 119 percent increase.
For the six months through September, the company increased its top-line by a robust 113 percent to Rs.8.83 billion.
The company share ended 40 cents or 2.92 percent lower at Rs.13.30 yesterday.
The company produces glass containers for multiple industries including food, liquor, pharmaceuticals, agrochemicals and soft drinks and has an expansive international business through exports.
As the company was coming out of the pandemic it was eager to expand its international market footprint to minimise the demand fluctuation that could come from possible disruptions to any one or few markets.
The published financial data wasn’t sufficient to assess what section of revenue was bought in by the exports and to what extent the sharp depreciation of the rupee against the dollar helped the company to boost its top-line as the company didn’t provide a breakdown as part of its interim results.
The investors and the analysts were waiting eagerly to parse the financial reports by the listed companies to get an understanding of how the runaway inflation, higher interest rates and the import controls reshaped their financial results in the forgoing quarter.
However, PGP Glass Ceylon wasn’t a very good proxy to do that as the company is into the B2B market and it has an expansive export component which gets a boost from the weaker rupee, irrespective of its volumes.
While the cost of sales rose by 120 percent in the quarter which more or less in lockstep with the surge in the top-line, the administrative cost escalated by 166 percent to Rs.235.8 million reflecting the operational cost challenges posed by higher logistics, salaries and other overheads caused by the red-hot inflation.
The quarterly finance cost also rose quite sharply from Rs. 39.9 million to Rs.115.3 million without much change in the borrowings, reflecting the impact of the soaring interest rates.
The company reported earnings of 77 cents a share or Rs.728.5 million for the September quarter compared to 32 cents a share or Rs.307.6 million in the same period last year. For the six month through September, the company reported earnings of Rs.1.46 a share compared to 57 cents a share. India’s PGP Glass Private Limited controls 78.65 percent stake in PGP Glass Ceylon while the Employees Provident Fund had 9.51 percent being the second largest shareholder in the company as of September end.
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