Restrictions slow Piramal Glass momentum in June quarter

The restrictions reimposed since mid-April on economic activities derailed the momentum at Piramal Glass Ceylon PLC, prompting the company to “aggressively” seek new international markets to blunt the impacts that could stem from the potential disruptions in its existing markets from the pandemic. 

Piramal Glass reported revenues of Rs.1.88 billion in the company’s first fiscal quarter ended in June, up from Rs.1.33 billion in the same quarter last year but down significantly from Rs.2.57 billion in revenues it earned in the previous quarter ended in March 2021, as the virus-related restrictions slashed part of 
domestic sales. 

Sri Lanka’s authorities reimposed myopic restrictions on a wide swath of its economy to contain a virus, which took a massive toll on millions of livelihoods and tens of thousands of businesses, which either remained shuttered or scaled their operations down, resulting in lower demand for bottled container makers such as Piramal Glass. 

As a result, the company said it now aggressively pushes its strategy seeking to expand its export markets, as a well diversified geographical market portfolio will help it to reduce the impact on its sales and profits from disruptions to any one or few existing markets.

“The company is aggressively exploring new international markets for its products in speciality liquor and premium water bottle segment,” said the company Executive Director and Chief Operating Officer Sanjaya Jain.  

“The strategy to innovate in new product design and development, with increased global footprint, has helped the company effectively mitigate demand fluctuations in its existing markets, due to the pandemic situation,” he added. 
The company grew its domestic share of the sales to Rs.1.28 billion in the quarter, from Rs.937 million in the year earlier period, logging a 36 percent increase while the earnings from exports rose by a faster 53 percent to Rs.601.0 million, according to a statement from the company. 

However, the company said it confronted some challenges on its exports from rising ocean freights, restricted availability of containers and vessel space. 

The company reported consolidated earnings of 25 cents a share or Rs.235.4 million in the April-June quarter, compared to a loss of 5 cents a share in the year earlier period and robust earnings of 42 cents a share in the March quarter. 

The company also improved its gross margins from 8 percent to 24 percent from a year ago. 

After the mandatory offer, the company’s new controlling shareholder, PGP Glass Private Limited – India, held a 78.65 percent stake in Piramal Glass, as of June 30 and the shareholders approved a resolution to change the company’s name to PGP Glass Ceylon PLC at the Annual General Meeting held last week. 

On March 30, PGP Glass Private Limited bought a 56.45 percent stake in Piramal Glass after its then controlling shareholder, Piramal Glass Private Limited – India, entered into a share sale and purchase agreement in December 2020, to sell its entire shareholding in the company. Thereafter, PGP Glass offered a mandatory offer to buy the remaining shares of the company, resulting in the 78.65 percent stake. 

The Employees’ Provident Fund had a 9.51 percent stake in the company, being its second largest shareholder.