DPL profits hit by Rathupaswala shake-up
View(s):Hayleys Group subsidiary, Dipped Products, recorded a consolidated turnover of Rs.23 billion in the financial year ending March 31, 2014 but group profits dropped by 29 per cent for the period.
In a filing to the Colombo Stock Exchange, DPL’s Hand Protection sector reported a 9 per cent reduction in turnover to Rs.13.4 billion from Rs.14.7 billion in the preceding financial year. However, the Sri Lankan manufacturing FOB turnover declined by 13 per cent during the period from Rs.8.3 billion in 2012/2013 to Rs. 7.2 billion. The plantation sector posted an increase in turnover, reflective of a 6 per cent growth amounting to Rs.10.4 billion, up from Rs.9.8 billion in 2012/13.
Despite numerous challenges encountered during the year – including the forced closure of the latex glove manufacturing factory at Rathupaswala, since July 30, 2013 – DPL sustained its revenue base with a marginal 2.4 per cent decline in turnover, the company stated in a media release.
Group Profit Before Tax for the reporting period declined by 29 per cent to Rs.1.5 billion, in comparison with Rs.2.2 billion in the previous financial year. Contribution to PBT from the Hand Protection sector was Rs.910 million, compared to Rs. 1.3 billion in 2012/13, thus recording a decline of 32 per cent. The reduction is directly attributable to the losses in production at Rathupaswala manufacturing facility. Contribution from plantations to PBT witnessed a reduction of 20 per cent, declining from Rs.928 million in the previous financial year to Rs.747 million during the reporting period, due largely to the combined effects of adverse weather and wage increase, the company noted.
Group Profit After Tax (PAT) declined by 35 per cent to Rs.1.2 billion down from Rs.1.8 billion in the previous financial year, it was stated.
Dipped Products (Thailand) Ltd, the medical glove manufacturing operation improved its overall performance during the financial year while the contribution from ICGUANTI S.p.A, DPL’s Italian marketing operation rose by 41 per cent versus the previous year. DPL Chairman Mohan Pandithage credited the Group for withstanding a challenging operating environment in 2013/14. “DPL has managed to overcome a very trying financial year, and has demonstrated its’ ability to sustain the business, yielding satisfactory results,” he noted.
“The company undertook a series of quick and critical decisions during the year to sustain the immediate and future performance of DPL. As a result, in 2013/14, the company incorporated a fully owned subsidiary DPL Premier Gloves Ltd, a new manufacturing facility established at the Biyagama Export processing zone to manufacture and export rubble gloves. The new facility will be key in moving DPL to a new phase of growth,” he further noted.
DPL Managing Director Dr. Mahesha Ranasoma cited DPL’s loyal customers as the core to its performance in the financial year. “We are, indeed, thankful to our customers for their support at what has been the most difficult operating period for DPL. Our customers extended their fullest support and cooperation and in turn we assured them of our commitment to serve them to the best of our capabilities in the future, as we have done in the past,” he noted.