The Dipped Products Group in the Hayleys stable of companies has enjoyed good returns in the last fiscal year ending March 31, 2012 despite a slowdown in Europe and the US but noted cost pressures due to rising fuel and electricity prices and escalation in wages.
These comments were made in the company statement to the media this week where the rubber glove manufacturing business reported turnover growth of 33 % to Rs.19.8 billion and pre-tax profit of Rs.2.38 billion inclusive of capital gains of Rs.1.14 billion, achieving three-fold growth over the previous year’s pre-tax profit of Rs.748 million. Consolidated net profit after tax for the year was Rs.2.09 billion, inclusive of capital gains.
Dipped Products and Hayleys Chairman Mohan Pandithage said DPL’s performance demonstrated its capability to generate sustainable business growth which is significant for the company since traditional markets in the Eurozone and America were battling a slowdown in their economies.
The Hand Protection sector’s contribution to profit before tax increased from Rs.374 million to Rs.728 million excluding capital gains, while Plantations increased its contribution to Rs.515 million from a profit of Rs.374 million in the previous year.
The profit attributable to equity holders of the company improved to Rs.1.87 billion. Basic earnings per ordinary share for the year totaled Rs.31.18, versus Rs.7.46 for 2010-11, the statement added.
Mr.Pandithage said a “cooling off” of rubber prices in the year reviewed in comparison with the unprecedented increases of 2010-11 had helped DPL’s Sri Lankan glove manufacturing operations to improve on the deteriorated margins of the previous year, thereby contributing significantly to the better performance of the business.
The dominant contributor in the Plantation sector was Kelani Valley Plantations PLC (KVPL). DPL’s second plantation company Talawakelle Tea Estates PLC (TTEL) contributed negatively to the sector’s profit due to low tea prices. “Both plantation companies were affected by the worker wage increase that became effective in April 2011,” Mr. Pandithage added. Dipped Products Managing Director Dr. Mahesha Ranasoma, discussing the future, said the local operations will be subjected to severe cost increase pressures consequent to all factors of production being impacted by recent increases in fuel and electricity as well as the overall escalation in labour wages.