Feb 04, Colombo: Piramal Glass Ceylon PLC reported its nine month ended results of December 31, 2018 with a turnover of Rs. 5,485 Million & PAT of 154 Million but the PAT (profit after tax) for the nine months was down to Rs. 154 Million against Rs. 251 Million, a year earlier.

The turnover for nine months at Rs. 5,485 Million showed an 8% growth against the previous year sale of Rs. 5,067 Million. Export sales grew by 31% from Rs. 1,627 Million to 2,123 Million whilst a drop of 3% was seen in the domestic market from Rs. 3,440 Million in F18 to Rs. 3,362Million in F19.

The third quarter ending December 31, 2018, has always been a very positive quarter for domestic sale each year due to the festival season. Yet these positive sentiments were not seen this year especially due to the unstable political climate in the country and the uncertainty towards policies, a company news release said.

The Domestic sale of F19 Q3 was Rs. 1,226 Million against Rs. 1,256 Million of F18 Q3 which showed a drop of 3%. Food, Beverage & Liquor segments continued to show a decline during the quarter as well as for the nine-month period when compared with the similar periods of the previous financial year, it added.

During the quarter export sale was stable at Rs. 733 Million as against Rs. 729 Million of previous year similar period.

For the nine months ended December 31, 2019 the gross profit margin has decreased from 21% to 16%.

"The gross profit during the period under review was severely impacted by the fuel price increase to the extent of 35% in LPG & 15% in Furnace oil which in turn has a directly impacted the prices of raw material, packing material & transportation costs, the release said.

"We regret to note that the relevant authorities have reduced the prices of petrol and diesel but have not addressed the price of furnace oil price in spite of drastic reduction of international crude oil prices. Our appeals to the authorities has gone unheard, heavily impacting the company profitability and sustainability of exports," Piramal said.

"It is very concerning to note the mixed approaches of the authorities towards exports. Much focus is made on exports, by encouraging business to promote their products, yet the government does not create a conducive environment by creating a level playing field. Whilst all neighboring countries have linked the furnace oil price to the global crude oil rates, we regret to note that we in Sri Lanka are yet to implement same."

The release said the company is continuously developing new bottle designs & markets for exports and accordingly investing in high tech infrastructure. "Our efforts have resulted to increased presence in the developed markets such as USA, Canada, Australia etc. Current investment in infrastructure is to the tune of Rs. 1.35 Billion which is mainly to cater international demand."

The government decisions to increase certain levies & taxes has impacted in the final products becoming more expensive. This has resulted in the consumer shifting towards cheaper and illicit products. This turn of events has impacted several manufacturing industries including packaging. Thus we feel this decision has neither benefited the industry nor added any additional revenue to the government. If this continues, domestic industry would be in trouble, Piramal said.