Says entering industrial supported glove market in 2Q with new factory
Dipped Products PLC (DPL), a non-medical glove manufacturer controlled by Hayleys group saw its June quarter (1Q16) net profit falling as much as 43 percent year-on-year (yoy) to Rs.131.5 million, the interim financial accounts released to the Colombo Stock Exchange showed.
The company said the profits were affected by strong competition from regional glove manufactures. The company’s plantations were also affected by lower global demand for tea.
As a result, the earnings per share for the quarter deteriorated to Rs.2.20 from Rs.3.85 recorded in the corresponding quarter of the previous year. The group turnover fell 35 percent yoy to Rs.5.65 billion while cost of sales fell at a faster pace of 36 percent yoy to Rs.4.77 billion. The resultant gross profit stood at Rs.874.3 million, down 33 percent.
Operational costs such as a administration expenses and distribution costs along with finance costs also fell yoy during the quarter under review.
As per the group balance sheet, short term lons and bank overdrafts as at June 30, 2015 stood at Rs.2.89 billion.
Revenue from hand protection segment declined to Rs.3.17 billion in 1Q16 from Rs.3.44 billion in 1Q15. The segment’s operating profit fell to Rs.214 million from Rs.331.6 million.
DPL Managing Director, Dr. Mahesha Ranasoma said the group was continuously focusing on cost reduction in their operations to defray pressure on margins.
“Our newly commissioned capacity for household gloves is now into commercial production and we are looking forward to enter into the industrial supported glove market in 2Q, as we are now ready to commission our new industrial glove manufacturing factory, namely D P L Universal Gloves Limited at Biyagama, Export Processing Zone,” Ranasoma stated.
The plantation sector’s revenue fell to Rs.2.58 billion from Rs.5.52 billion. The operating profits fell to Rs.22.7 million from Rs.213.6 million.
Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for a 5 percent share of the global market. The company’s products now reach 68 countries.