Business Times

Lanka Tiles posts increased profits

Lanka Tiles PLC is looking at developing a comprehensive 5-year strategy for the Group which includes plans to increase manufacturing volumes by 50% while the company will continue to invest in production capacity to cater to untapped market demand.

In the company’s 2009/10 Annual Review, Managing Director J.A.P.M. Jayasekera noted that the financial year did not start with a bright outlook due to rapidly deteriorating economic conditions both locally and globally. The company was forced to shut down the factory for over 2 months in the first quarter which led to a sharp drop in Group profits but recovered to post increased net profits by 34% to Rs.379 million for the year.

Gross revenue increased during the period under review to Rs.2.8 billion compared to Rs.2.5 billion in 2009. Gross profit also increased to Rs.865 million from Rs.748 million last year. Other operating income increased slightly to Rs.12.6 million from Rs.11.6 million while distribution costs and administrative expenses increased for the year.

Mr. Jayasekera noted that the company is well positioned to benefit from post-war economic resurgence. However, he said the impact of possible adverse developments with regard to exchange rates and financial instability sweeping across Europe and the US should not be underestimated. Energy costs are also gradually increasing and forecasts indicate that domestic fuel prices of kerosene and diesel will be raised to match global prices and to bridge consequent losses at the Ceylon Petroleum Corporation (CPC).

Mr. Jayasekera further stated that the proposed acquisition of the majority of shares of Shell Gas Lanka Ltd. by the Sri Lankan government does not augur well for industries using LPG. He said past experience suggests that the government lacks the necessary professional wherewithal to successfully run an energy company catering to a substantial sector of the national economy.

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