Dipped Products sustains strong growth in first nine months of 06-07

The Dipped Products Group (DPL) has sustained strong profit and turnover growth in the nine months ending December 31, 2006.
The Hayleys Group's multinational hand protection company which also has a significant interest in plantations, has reported that profit after tax has more than doubled at the end of the third quarter of 2006-07, growing 125 per cent over the corresponding nine months of the previous year to Rs 528million. Turnover for the period was up 40 per cent to Rs 7,163 million. DPL's nine-month profit before tax at Rs 589 million reflected a growth of nearly 100 per cent, the company said.

"These figures represent a solid performance from all manufacturing facilities in Sri Lanka, and help mitigate to some extent, the losses in Thailand," a spokesman for Dipped Products said. "Although our facility in Thailand contributed substantially to turnover, higher latex prices and the strength of the Thai Baht against the US Dollar continued to erode margins."

However, the wider acceptance of the medical gloves manufactured by Dipped Products (Thailand) Ltd which was reflected in stronger sales over the previous year and led to higher utilisation of plant capacity in the period reviewed, augurs well for the future prospects of this venture, the spokesman said.

Of the Group's two areas of business, hand protection posted a 44 per cent growth in turnover to Rs 5,662 million, while Kelani Valley Plantations Ltd., (KVPL) increased its turnover by 28 percent to Rs 1,805 million, through increases of 60 per cent from rubber and 13 per cent from tea. KVPL's profit before tax grew by 127 per cent to Rs 263 million largely on the back of strong rubber prices.

The DPL Group's results reveal that its strong performance in the first nine months of the current year is mirrored in substantial Earnings per Share growth from Rs 3.09 at end 2005 to Rs 7.31 as at December 31, 2006, a growth of 2.4 times or 137 per cent. Elaborating on the performance of the Group's local rubber glove manufacturing operations, the spokesman said: “Manufacturing in Sri Lanka continued to show remarkable improvements, with profits in the third quarter also being more than double that of the corresponding quarter of last year, on account of export volume growth and better margins.”