Dipped Products PLC (DPL), the Hayleys Group’s multinational rubber glove manufacturing business which also owns and manages Kelani Valley Plantations PLC, saw its group’s post-tax profit fall by 11 % to Rs 304 million in the nine months of the 2008-2009 accounting period.
High latex prices and escalation in the cost of energy during the first half of the year eroded margins in local Hand Protection manufacturing in the period reviewed, resulting in lower pre and post tax profits at Group level.
It also reported a turnover of Rs 9.2 billion for this period, up 15 % over the corresponding period of the previous year, according to a company statement based on figures released to the Colombo Stock Exchange this week.
Turnover from Hand Protection grew 12 % to Rs 7.2 billion despite an export volume drop of 7 % from Sri Lankan manufacturing operations, while turnover from Plantations grew 34 % to Rs 2.5 billion before adjusting for inter-segmental sales.
Dipped Products Thailand, the Group’s medical glove manufacturing business performed substantially better and avoided losses in its final quarter ending December 2008 with encouraging improvements in production, sales volume and earnings, the statement added.
The increase in Hand Protection turnover came mainly from DPL’s Italian marketing company, ICOGUANTI S.p.A and higher revenue obtained by exports from Sri Lanka due to better prices in the period under review.
Turnover growth in the group’s plantations business came from a 37 % improvement from tea due to higher production and better prices and a 27 % increase in revenue from rubber.
Commenting on these results, DPL Managing Director J. A. G. Anandarajah said the group had arrested the rate of decline in profit recorded for the first half of the year through increased prices. He added that local manufacturing improved its performance in the third quarter following reductions in rubber and fuel prices.
However, the continuing strength of the rupee and indications of softer demand in global markets could keep the group’s local manufacturing businesses under pressure in the final quarter, he said.
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