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DIPPED
PRODUCTS GROUP'S NET PROFIT UP 81% IN FIRST 9 MONTHS
-16-02-2005-
The Dipped
Products Group (DPL) has reported very healthy profit growth for the
nine months ending December 31, 2004, with excellent contributions from
its manufacturing, international marketing and distribution and
plantation sector operations.
Figures circulated this week show that consolidated profit before tax
rose by 64 per cent to Rs 472.6 million over the corresponding period of
last year on a turnover of Rs 4.4 Billion, which was up 22 per cent. Net
profit for the period under review grew by a remarkable 81 per cent to
Rs 339 million. This follows a 71 per cent growth achieved in the first
six months of the year.
These figures embody growth on all fronts of the Group's operations,
with the plantation sector represented by Kelani Valley Plantations
Ltd., (KVPL) reporting profit growth of 75 per cent; profits from the
rubber glove manufacturing sector growing 54 per cent; and the
contribution of DPL's Italian distribution and marketing company ICO
Guanti SpA, growing by Rs 30 million or 20 per cent.
According to DPL Managing Director N. G. Wickremeratne, improved prices
for rubber gloves coupled with stronger demand from international
markets and the solid performance of KVPL were the main contributory
factors to profit growth. He said capacity utilization at the group's
manufacturing plants had been near 100 per cent due to demand in the
period under review. Earnings were also helped by exchange gains up to
December 31, due particularly to the strong performance of the Euro.
The outlook for the group has been boosted further by the commissioning
in January of the first production line at its medical glove
manufacturing facility in Thailand, which represents DPL's venture into
this high volume though competitive sector. The Thai factory is expected
to become fully operational by end March.
Another significant development is the consolidation of the Hayleys
Group's holding in DPL consequent to the decision by Richard Peiris &
Company Ltd., to sell its stake of nearly 30 per cent in the company.
Approximately a third each of this tranche of shares has been acquired
by the Hayleys Group, foreign collaborators who already had a stake in
DPL, and DMH Capital which represents 115 of the company's management
staff and Aureos Capital.
As a result, there is now a greater convergence of the interests of
major stakeholders in future improvements of DPL, Mr. Wickremeratne
said. The DMH stake is a long term investment by the company's managers,
who are not expected to have access to the shares for a seven year
period, and returns would depend on the company's performance over this
period.
He also reported that two foreign shareholders of Venigros, one of DPL's
high-end industrial glove manufacturing companies in Sri Lanka, had
divested their holdings and increased their stakes in DPL to more than 6
per cent each. Their shares in Venigros were acquired by DPL, making it
a fully owned subsidiary of the group.
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