Piramal Glass: exports boost profits

Piramal Glass Ceylon said rising exports contributed in its profit in the December 2009 quarter, the company“s second successive quarterly profit after six consecutive quarters in the red.
The firm,…

Piramal Glass Ceylon said rising exports contributed in its profit in the December 2009 quarter, the company“s second successive quarterly profit after six consecutive quarters in the red. The firm, based in Sri Lanka, is a unit of India“s Piramal Glass, reported a net profit of LKR 28.7 million in the December 2009 quarter compared with a loss of LKR 53.6 million rupees the previous year. Sales during the quarter for Piramal, the sole container glass manufacturer in the domestic market, increased 11.8% to LKR 909.5 million, and, according to chief executive Sanjay Tiwari, the increase in sales during the quarter was only due to the increase in exports, which totalled LKR 243 million rupees, an increase of 241% compared to a year ago. Earnings per share for the December quarter were LKR 0.03 compared to a loss of LKR 0.06 the previous year. The statement also said the company converted more than half of its long-term rupee debt to foreign currency loans in November 2009 with the same consortium of banks, during its aim to reduce costs. The two successive quarters of profit helped the company to reduce losses in the nine months ending 31 December 2009, which ended with a loss of LKR 89 million, compared to LKR 207 million for the same period the previous year. During the nine months ending 31 December 2009, sales were up 19% to LKR 2.7 billion compared to the year before. Once again PGC has demonstrated its capability of selling the capacities in the international market by achieving an encouraging growth of 210% in export sales as against the corresponding period in the previous year, Tiwari said. Exports during the nine months increased to 34% of total revenue, while they were 13% in same period the previous year. During the nine months under review, Piramal“s exports were 20,000 tonnes, consisting of more than 73 million bottles. According to Tiwari, the domestic market decreased 9% compared to the same period of the prior year. The company has yet to realize the benefits in the domestic market with the opening up of the north and east subsequent to the cessation of the war, which ended in May 2009, after 30 years, and resulted in economic activity reviving in the north and east. The company also said that its profitability had been damaged by rising liquid petroleum gas prices. The company got hit by the continuous increase in the LPG prices as PGC is one of the largest industrial consumers of LPG in the country and other input costs which affected the profitability of the company in a significant manner. Piramal Glass Ceylon makes glass containers for food and beverages, pharmaceuticals, cosmetics and perfumery, also launching some new bottles in the international market, the company said. The company has a domestic market share of 88% and has a future strategy aimed at the export of speciality, value-added liquor and boutique wine bottles to markets such as India, Australia and South Africa.