Dipped Products 3Q turns Rs.107mn net profit; plantations weigh

Dipped Products PLC (DPL), the non-medical glove manufacturing unit of the Hayleys group, made a net profit of Rs.1.78 a share or Rs.106.7 million for the quarter ended December 31, 2016 (3Q17) amid a strong top line growth, while keeping the costs under watch, the interim results filed with the stock exchange showed. 
The profit was against a Rs.78.9 million net loss incurred during the same quarter last year. 
The group turnover rose by 23 percent year-on-year (YoY) to Rs.6.2 billion, while the direct costs rose by 21 percent YoY to Rs.5.1 billion, resulting in a gross profit of Rs.1.1 billion, up by a strong 32 percent YoY. 
For the nine months ended December 31, 2016, the company, which also manages plantations, grew its earnings by a modest 13 percent to Rs.1.42 a share or Rs.85.3 million as much of the profits were wiped out by the troublesome plantation sector performance during the period. 

Revenue for the nine months was Rs.17.7 billion, up 11 percent from the same period a year ago. 
DPL’s hand protection segment is recovering from a loss of orders globally amid severe competition and production snags locally due to external factors. 
During the period, DPL started commercial operations of its industrial glove manufacturing facility, D.P.L. Universal Gloves. 
The group’s plantation segment faced headwinds during recent times due to lower tea crop that resulted from adverse weather conditions and the ban on weedicides. This segment was further impacted by lower tea and rubber prices that prevailed at the time. 
As a result, for the nine months, the plantation segment of the group turned an operating loss of Rs.140.3 million from a profit of Rs.23.6 million a year ago. 
During the same period, the group’s hand protection segment made an operating profit of Rs.704.9 million, up from Rs.505.3 million a year ago. 
As of December 31, 2016, Hayleys PLC held a 42.12 percent stake in DPL, while the state-controlled private sector pension fund, the Employees’ Provident Fund, held a 12.76 percent stake, being the second largest shareholder.