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Dipped
Products turnover Rs 8 billion in first 9 months of ’07-08
Dipped
Products PLC (DPL), the Hayleys Group’s leading global rubber glove
manufacturer has reported a turnover of nearly Rs 8 billion for the
first nine months of 2007-08, following an increase in export volumes in
its local hand protection businesses.
In results released to the Colombo Stock Exchange this week, DPL, which
has a significant interest in plantations, reported that turnover had
grown 12 per cent in the nine months ending December 31, 2007. The
company’s hand protection businesses contributed Rs 6.5 billion to this
result and plantations Rs 1.9 billion, including inter-segment sales.
Volumes of rubber gloves exported from Sri Lanka increased by 11 per
cent over the corresponding period last year, helping to generate an
overall turnover growth of 14 per cent from the hand protection segment.
Turnover at the end of the third quarter of DPL’s plantation company
Kelani Valley Plantations PLC, (KVPL) grew 5 per cent.
“Our top line performance has been satisfactory,” Dipped Products’
Managing Director J. A. G. Anandarajah commented, disclosing that
several factors, including higher rubber prices, escalating production
costs and adverse exchange rate movements had slowed profit growth for
the nine months.
The DPL Group’s pre tax profit for this period at Rs 431 million was
down 22 per cent after excluding the extraordinary income earned in
2006-2007. Group profit after tax was Rs 343 million, a drop of 35 per
cent over the first nine months of the previous year.
DPL Thailand, the company’s medical glove venture has performed no
better than it did last year. Intensive efforts are being made to turn
this company around but the results would only be realised in the next
financial year, Mr. Anandarajah said.
In the Group’s two segments of business, pre-tax profit from hand
protection at Rs 358 million was marginally higher than in the previous
year.
Among the significant factors that affected the bottom line of this
segment were higher rubber prices, freight, energy, packaging materials,
chemicals and wages costs and the appreciation of the Rupee by 4 per
cent during the period. The cumulative impact of these factors was over
Rs 300 million.
Kelani Valley Plantations recorded a decline in pre-tax profit of Rs.80
million or 27 per cent up to the end of the third quarter, largely due
to crop losses in tea as result of the strikes late in 2006, adverse
weather conditions and a higher wages bill.
Looking ahead, Mr. Anandarajah said steps already taken to improve
performance of the hand protection segment would be reflected in the
final quarter of the year, but their impact could be negated somewhat by
a continuing increase in costs. The performance of the plantation
company in the fourth quarter however, is expected to improve
significantly given favourable market conditions for both rubber and
tea, he added. .
To face these challenges, DPL is introducing new higher value products,
adding value by improving existing products and also taking several
steps to reduce costs, including the introduction of an alternative to
furnace oil powered boilers at one of its manufacturing facilities, Mr.
Anandarajah said.
Established in 1976, Dipped Products is one of the leading non-medical
rubber glove manufacturers in the world, and accounts for a 5 per cent
share of the global market. The company’s products now reach sixty-three
countries.
The Board of Directors of Dipped Products PLC comprises Messrs N. G.
Wickremeratne (Chairman), J. A. G. Anandarajah (Managing Director), H.
A. Pieris, R. W. Soysa, , Dr. W. S. E. Fernando, G. K. Seneviratne, N.
Y. Fernando, N. B. Weerasekera, R. K. Witanachchi, A. M. Pandithage
(Alternate: R. A. Ebell) and R. Seevaratnam.
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