Piramal Glass Ceylon PLC has posted a net loss of Rs.36.4 million for the quarter ended September 30, 2016 (2Q17).
This comes after a net profit of Rs.139.9 million a year ago, and is due to the company’s only facility located in Horana being closed for two months for upgrade and capacity enhancement, as the results filed with the Colombo Stock Exchange showed.
The loss per share was 4 cents against an earnings of 15 cents recorded for the same period last year. The factory was closed for upgrading in July after operating continuously for 9 years. During the closure the company met half the demand through bottle imports, mainly from its parent company in India.
But the company said it was, “not at all a profitable venture”, to import and sell due to cost differential of bottles in India and other parts of world and huge transportation costs.
“Yet a conscious decision was taken by the management to import even at break-even price to ensure customer of continuous deliveries thereby maintaining the commitment of uninterrupted supplies to all segments.
Nevertheless this decision has impacted the profitability margins during the 1st half of the year as against the previous year,” the company said in a statement.
Piramal Glass, former Ceylon Glass Company, has been in business for over 55 years in Sri Lanka and is the only glass bottle manufacturing plant in Sri Lanka which offers glass containers for multiple industries such as food, liquor, pharmaceutical, agro chemical and soft drinks.
During the quarter under review, the revenues declined by a little under 5.0 percent year-on-year (yoy) to Rs.1.4 billion while the cost of sales rose 12.0 percent yoy to Rs.1.35 billion.
For the six months to September, the company earned a revenue of Rs.3.1 billion, little changed from last year but the cost of sales rose by close to 14percent yoy to Rs.2.73 billion.
The net profit for the six months fell by almost 75 percent yoy to Rs.73.1 million with an earnings per share deteriorating to just 8 cents.
During the nine months, the long term borrowings rose by a little over Rs.2.0 billion, perhaps for the factory upgrade.
India’s Piramal Glass Limited held 56.45 percent stake in the company while the state controlled private sector pension fund Employees’ Provident Fund held 9.51 percent stake being the second largest shareholder.
Norges Bank, the Central Bank of Norway, held 2.68 percent stake being the third largest shareholder of Piramal Glass Ceylon.