Sri Lanka’s only glass bottle maker returns to profit in second quarter

Sri Lanka’s only glass bottle marker, Piramal Glass Ceylon PLC returned to profit during the September quarter (2Q20) amid improved domestic sales following a capacity increase carried out in the first quarter of the financial year.

The firm reported earnings of 8 cents a share or Rs.73.4 million for 2Q20 compared to a loss per share of one cent or Rs.8.5 million for the same period last year.
The sales revenue for the quarter rose 3 percent year-on-year (YoY) to Rs.1.94 billion.

“This growth came in primarily from the domestic market, which grew 14 percent over the corresponding period of the previous year. 

All product categories showed an improvement, but the growth in liquor segment was significant.  After a gap of 3 years, domestic markets are indicating positive trends. Due to the local demand, a few export orders were deferred to the next quarter,” Piramal Glass Ceylon said in an earnings release. 

Export sales for the quarter under review stood at Rs.659 million as against Rs.757 million of the previous year. 

During the period, the company launched a premium liquor bottle for the Indian market and a green hued water bottle for the Maldives market. The quarter witnessed sampling of a few new products for new markets, which will be commercialised in the second half of the year. 

The company expects to enter the premium liquor specialty segment with these new products.

The gross profit of the company improved 19 percent YoY to Rs.367.9 million while the operating profit rose 10 percent YoY to 
Rs.202.8 million.

For the six months ended September 30, 2019, the company reported earnings of 10 cents a share or Rs.94.5 million compared to earnings of four cents or Rs.38.5 million reported for the same period last year.

Despite flat revenue of Rs.3.5 posted for the six months, the company was able to cut its sales cost to Rs.2.9 billion from Rs.3.04 billion to report higher gross and operating profits. 
“The investment on the sixth production line during the first quarter this year paid dividends during second quarter. The enhanced capacity helped the company to cater to the increased domestic demand. 

“Also the increased production volumes helped the company to absorb the cost escalations and to better its profitability as against the similar period of previous year,” Piramal Glass Ceylon said.

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