BPPL Holdings PLC said its top line growth was constrained by the use of its recycled plastic—a key ingredient in the making of brush and brush filament—for trials in its new yarn plant, which was not in full commercial production by end-December 2019.
BPPL Holdings, the maker of brush and brush filament, mainly for a clientele in North America and Europe, reported third quarter sales of Rs.673.6 million, down 5 percent from the same period, last year.
“However, the overall sales growth was curtailed by a 75 percent drop in excess waste bottle/flake sales in the current year, as extra quantities were used in yarn trials,” stated the company’s Chief Executive Officer Dr. Anush Amarasinghe.
Since 1984, the company has been manufacturing a range of brushware and cleaning products for both professional and household applications.
The company supplies its brushware to international clients, mainly in North America and Europe and offers its own branded products too.
In the previous two quarters, the company saw its sales to the two regions moderating but now it sees an uptick in the volumes due to the phase one trade deal between the United States and China.
“We are also now seeing an improvement in customer orders to our traditional brush markets, following the conclusion of the trade discussions between the US and China,” Dr. Amarasinghe said in an earnings release.
The company in the recent years has diversified into synthetic filament extrusion and polyester yarn production and these new lines cater to the customers both in Sri Lanka and overseas.
Amarasinghe expects these new lines to become dominant contributors to the group financials in the medium term.
For the October-December quarter, the company reported earnings of 32 cents a share or Rs.99.2 million, compared to earnings of 18 cents share or Rs.54.1 million reported for the same period, last year.
The bottom line was helped by lower administrative expenses, which nearly halved to Rs.76.7 million, from Rs.135.7 million a year ago.
“Revenue from the new polyester yarn operations were not recognised in the reported period as full commercial production was delayed due to a faulty component in one of the plant’s power unit.
However, I am pleased to announce that commercial operations have now begun with 70 percent of plant capacity booked for the January-March 2020 period. The project costs will, therefore be capitalised and revenue recognised in that quarter,” Dr. Amarasinghe added.
In July, last year, a fire destroyed a warehouse and damaged another, which led the company to write off assets valued at Rs.144.5 million, based on the initial assessment.
The company received an interim insurance claim of Rs.144.5 million and a final claim has been submitted and the evaluation is currently in progress.
Meanwhile, for the nine months ended December 31, 2019, BPPL Holdings reported earnings of 98 cents a share or Rs.301.1 million, compared to earnings of 70 cents a share or Rs.216.2 million reported for the same period, last year.
The sales languished, recording little over Rs.2 billion, against Rs.1.97 billion in the year earlier period.
BPPL’s parent, Infinity Capital Private Limited, holds a 50.31 percent stake in the firm while LOLC Investments Limited and Hirdaramani Investments Holdings Private Limited have 26.25 percent and 13.44 percent stakes, respectively, being the company’s second and third largest shareholders.