BPPL Holdings ups net profit by 42% to Rs. 436 m in FY17

Monday, 29 May 2017 00:58 - - {{hitsCtrl.values.hits}}

IN-1 BPPL Holdings has announced impressive unaudited financial results for the 12 month period April 2016 to March 2017.

Consolidated revenue for the period was Rs. 2.4 billion, up 16% over the corresponding period in the previous year. The North American region accounted for 77% of the reported revenue. The region saw a 21% increase in revenue over the previous financial year. High growth was also seen in New Zealand, Indonesia and Sri Lanka although from smaller bases.

In the United States, robust revenue growth was seen in the food services, janitorial and oil and gas sectors. Revenue slowed in Australia and Britain due to client inventory adjustments and new product launches in the previous financial year causing increased orders in that year. Sales to Britain were also affected by Sterling depreciation vs. the Sri Lankan Rupee during the period.

Overall revenues were also strong as the company pursued its dual objectives of penetrating the household market segment both through direct sales to retailers and own branded goods sales in Sri Lanka and Indonesia. Direct sales accounted for 10% of total sales for the period, up 20% year-on-year. Own branded goods also grew by 59%, again over the corresponding period in the previous year.

Gross profit was up by a faster 26% year-on-year to Rs. 963 million due to margin expansion amid revenue growth. Gross profit margins, which improved from 37% to 40% during the 12 month period ended March 2017, continued to benefit from higher productivity, lower freight rates, lower costs as a result of improved raw material sourcing and Sri Lankan Rupee depreciation against the US Dollar.

Improved productivity and stringent cost controls also led to a 41% increase in operating profit (EBIT) to Rs. 512 million compared to the same period in the previous year. Moreover, margins continued to expand to 20% at a Profit-Before-Tax level due to lower interest expenses as accumulated profits were used for debt retirement. Profit-Before-Tax was Rs. 491 million for the period whilst Profit-After-Tax attributable to the company’s shareholders was Rs. 436 million, an increase of 42% year-on-year. Non-annualised EPS for the period amounted to Rs. 1.42.

Meanwhile, BPPL Holdings moved ahead with its plans for extruding synthetic yarn by placing orders with machinery suppliers following successful trials conducted with its own hot washed recycled PET flakes and discussions with leading textile producers. The construction of a new factory in the Horana BOI Industrial Zone also commenced in January 2017. This yarn production facility, which involves an investment of Rs. 675 million, is set to come on-stream in the January to March quarter of 2018 and contribute to revenue from April 2018.

The company also commenced power generation from its own 347KW solar and 200KW biomass based power plants at the end of March 2017. A full year’s impact of this would be seen in the new financial year ending March 2018.