Piramal Glass incurs Rs.450mn sales loss due to production stoppage

Piramal Glass Ceylon PLC (PGC) said it incurred a loss of sales to the tune of Rs.450 million, including exports worth of Rs.200 million, during the month of March, due to the closure of operations amid 
COVID-19 lockdowns.

The company said the restricted working hours and curfew situation imposed due to the pandemic, resulted in stoppage of bottle production by mid-March but it had to keep its kiln alive, incurring a considerable energy cost.
PGS is the only glass bottle manufacturing plant in Sri Lanka.

As per the unaudited financial statements released to the Colombo Stock Exchange by PGC for the March quarter (4Q20), the company reported a 10 percent year-on-year (YoY) decline in turnover to 
Rs.1.69 billion.

“The domestic sales dropped from Rs.1,330 million to 1,258 million, whilst exports dropped from Rs.583 million to Rs.441 million, when compared to F19 fourth quarter,” PGC said in a statement.

The company reported earnings of 6 cents a share or Rs.58.7 million for the quarter under review, compared to earnings of 20 cents a share or Rs.192.5 million reported for the corresponding quarter of the previous year.

Commenting on the March quarter performance, Executive Director/COO Sanjay Jain said, “We are currently operating in unprecedented conditions and are making every effort to provide our customers with innovative and efficient solutions by offering new designs.

“The company has faced a challenging quarter and the results have been adversely impacted from mid-March and is expected to bear a ripple effect in the future too. As the COVID-19 pandemic situation is still evolving, it is difficult to quantify the future business impact on the company,” he added.During the March 2020 quarter, the company continued with its new innovative product developments and launches in the export market, in its varied colour range. 

While gross margin for the quarter fell from 27 percent to 16 percent, when compared with the similar period of the previous year, the company was able to maintain the annual gross margin at par with the previous year, at 19 percent.

However, for the full year ended March 31, 2020, PGC reported higher earnings of 41 cents a share or Rs.388.9 million, compared to earnings of 36 cents a share or Rs.346.3 million reported for the previous year, despite the production stoppage in the March quarter.

The turnover for the full year was Rs.7.5 billion, compared to Rs.7.4 billion a year ago.

In line with the consistent policy of 50 percent payout ratio, PGC’s board of directors has proposed a dividend of 20 percent.

Meanwhile, during the year, the company witnessed a 12 percent growth in the domestic market and an overall growth of 2 percent.

The investment of over Rs.1 billion made on a sixth production line during the first quarter of the financial year helped the company to maximise its capacity utilisation.The company has restarted the manufacturing site with 100 percent capacity utilisation from the second half of May 2020, with all necessary arrangements at its work locations to ensure stringent levels of hygiene and safety, as per respective government regulatory guidelines.

 
Piramal Glass Private Limited holds a 56.45 percent stake in Piramal Glass Ceylon, as the controlling shareholder. The Employee’s Provident Fund has a 9.51 percent stake in the company, being the second largest shareholder.