Bogala Graphite back in black after temporary mine closure

25 April 2018 09:47 am - 0     - {{hitsCtrl.values.hits}}

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By Chandeepa Wettasinghe

Bogala Graphite PLC, one of the world’s leading exporters of vein graphite, rebounded in the 1st quarter of 2018 with Rs. 44.3 million in net profits compared to Rs. 4.3 million in net losses in the corresponding quarter last year, with its mining operations returning to normalcy following a temporary suspension caused by an accident.


The interim financial statement for the quarter, which ran from January to March 2018, said that Bogala Graphite posted Rs.0.47 earnings per share, compared to Rs. 0.04 loss per share year-on-year (YoY). The company share price closed at Rs. 15.50, up 12.3 percent yesterday.


The death of an employee working in Bogala Graphite’s mine during late January 2017 resulted in the mine being closed for half a year, until the Moratuwa University, which has expertise on mine safety, released a report exonerating the company from the blame and stated that the company’s safety practices were above accepted norms.


The full three months of operations in the first quarter of 2018 saw revenue increasing 25 percent YoY to Rs.223.9 million, while cost of sales were contained, down 6 percent YoY to Rs. 122.5 million. Gross profits doubled to Rs. 101.4 million YoY. 

 

The firm’s operating profits increased to Rs. 47.2 million from an operating loss of Rs. 1.4 million YoY. Bogala Graphite incurred higher selling and distribution costs, although this was offset by other income and gains. 


There was no escalation in administrative expenses, since the company had downsized its management structure last year. Further, the company will continue to pay to the surviving family of the victim on a monthly basis, until his day of retirement was recorded last year.


With the increase in business, the company balance sheet expanded to Rs.621.7 million from Rs.608.7 million at the start of the financial year, with higher dues from customers and prepayments being recorded, balanced off by retained earnings. 


Net assets per share increased to Rs. 3.89 at the end of the quarter, compared to Rs. 3.42 at the start of the financial year.


Bogala Graphite’s largest shareholders are Graphit Kropfmuhl GmbH, which owns 79.58 percent of the shares, and Alterna GK LLC which controls a 10.33 percent stake.

 

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