Piramal Glass Ceylon FY20 net profit up 12.4% to Rs. 389 m

• Proposes a final dividend of 20%; turnover improves to Rs. 7.5 b in challenging year

Piramal Glass Ceylon PLC (PGC) closed the year FY20 with a total turnover of Rs. 7,531 million as against Rs. 7,398 million in the previous year.

Profit After Tax rose to Rs.389 million as compared to Rs. 346 million of the previous year, reflecting a growth of 12.4%. In line with consistent policy of 50% payout ratio, the Board of Directors have proposed a dividend of 20%. 

This performance for the year is achieved despite of the stoppage in production and sales towards the second half of March due to COVID-19 pandemic.  

The operations were running at full capacity and sales at its peak with the Sinhala Avurudu festival round the corner when the pandemic catastrophe impacted the total country’s business environment. Restricted working hours and curfew situation imposed due to COVID-19 resulted in stoppage of bottle production by mid-March, yet the kiln was kept live incurring considerable energy cost. 

With the Food, Pharmaceutical and Agro Chemical sector industries being declared as essential services Piramal Glass too commenced partial operations by mid-April to ensure continuous supply of glass bottles to these organisations. The overall loss of sales during the month of March due to closure of operations was to the tune of Rs. 450 million which includes exports of over Rs. 200 million. 

The turnover for the quarter ended 31 March showed a decline of 10% at Rs. 1,699 million as against Rs. 1,913 million of the previous year similar quarter. The domestic sales dropped from Rs. 1,330 million to Rs. 1,258 million whilst Exports dropped from Rs. 583 million to Rs. 441 million when compared to F19 fourth quarter.

During the year, the company witnessed 12% growth in the domestic market and an overall growth of 2%. 

The investment of over Rs. 1 billion made on a sixth production line during the first quarter of this financial year helped the company to maximise its capacity utilisation.

During this quarter, the company continued with its new innovative product developments and launches in the export market in its varied colour range. 

Whilst Gross Margin for the quarter under review fell from 27% to 16% 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%.

The PBT for the year stood at Rs. 495 million in F20 as against Rs. 510 million in F19 whilst the PAT was at Rs. 389 million as against Rs. 346 million of the similar period previous year.

Commenting on the fourth quarter performance, Executive Director and 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.”

He also continued to say: “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.  

“However, we are committed to ensure uninterrupted supply of glass bottles to all our customers and we believe that demand would gradually get back to normalcy during the coming financial year. The export sales have also come under pressure due to lockdown situations and the new rules and regulations laid down by different countries.”

The company has restarted manufacturing site with 100% capacity utilisation from the second half of May with all necessary arrangements at our work locations to ensure stringent levels of hygiene and safety as per respective Government regulatory guidelines.