Piramal Glass ends year with record growth; declares 35% dividend

Piramal Glass Ceylon PLC Board of Directors (from left) Ranjit Fernando, Chairman Vijay Shah, Dr. Bandula Perera and Sanjay Tiwari, (Samit Datta not in the picture)

Piramal Glass Ceylon PLC (PGC) ended a very successful year with a record growth in turnover and profitability. The company recorded its highest ever turnover this year of Rs.6,755 million and a profit after tax (PAT) of Rs.654 million. With this achievement, the board of directors have proposed 35 percent dividend maintaining its consistent policy of dividend pay-out ratio. 
The revenue achieved for the year was Rs.6,755 million depicting a growth of 17 percent as against Rs.5,792 million of the previous year. The revenue growth was mainly contributed by the domestic sales which saw a significant growth of 23 percent from Rs.4,422 million to Rs.5,436 million. The major portion of growth was backed by the food and beverage segments.
The export market remained constant for the year under review as the focus was to service the growth in the domestic market. Some mid mass export orders were deferred to make available capacity for the domestic production. Yet, amidst these constraints, it was motivating to see several new products being designed and launched in the USA market. In the export portfolio, the USA is now amongst the top three exporting locations of PGC.
The F16 4Q reflected a marked improvement against that of the similar quarter in F15 due to exceptional sales during the festive season. The total sales during the quarter grew by 18 percent from Rs.1642 million to Rs.1938 million of which the domestic sales and exports were up by 21 percent and 6 percent, respectively.
During the year under review, there were unforeseen interruptions in the production processes due to ageing furnace. However, the company serviced the increased domestic demand by stretching the production and temporarily resourcing through trading even though it is not economically attractive.  
The operational achievement was marred by the furnace oil rate, which is still at the 200 percent above the international level. This has affected the exports of the company as there is no level playing field to compete in the international market. The company has made several representations to the relevant government authorities to support the domestic industry, which in turn will help in increasing the export revenue for the country.
The gross profit for the year was at Rs.1,497 million as against Rs.1,117 million of the previous year with a growth of 34 percent whilst the operating profit as Rs.879 million as against Rs.635 million of the previous year. The incremental profit is the outcome of the increased sales volumes.
The earnings per share increased by 50 percent to Rs.0.69 per share as against Rs.0.46 per share during the previous year.
PGC CEO and Managing Director Sanjay Tiwari said, “The company’s furnace, which was built in 2007, is due for rebuilt and relining during F2017. The relining together with enhancement of capacity from existing 250 tonnes per day to 300 tonnes per day and technological improvements to the existing machinery by adding further flexibility is scheduled to be carried at an investment of Rs.3 billion during the second quarter of the current financial year.
This upgraded facility will help the company to service the present and future increased demand in the domestic segment for all industries namely food and beverages, pharmaceuticals, agro chemicals, liquor the upcoming segment of virgin coconut oil. The new facility will also enable PGC to deliver more innovative designs in different sizes and colours. The company is also doubling the facility for producing colour bottles through colouring forehearth. This expansion also includes further investment in more sophisticated down-stream facilities.”