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| Sunday, 20 February 2005 |
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Dipped Products Group net profit up 81% to Rs. 339 million in nine months The Dipped Products Group (DPL) has reported 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. 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 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 a 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 utilisation 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 through 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 and 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, 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. DPL also said Nissanka Weerasekera of Aureos Capital has been invited to
join the Board as a representative of DMH Capital. Shareholders' approval
was being sought at an EGM on February 18 for the Board appointment of Henry
Peiris, a founding Director of the Company and a significant shareholder.
Peiris, formerly Chairman of Richard Peiris and Co. Ltd. resigned from the
DPL Board in early December 2004, when Richard Peiris and Co. was disposing
of its shareholdings in DPL. |
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