Dipped Products turnover up 16% to Rs. 7,109 million

The Dipped Products Group (DPL) has reported robust growth in sales volumes and revenue in 2005-06, against what the company calls 'a tide of adverse factors.'

In results released to the Colombo Stock Exchange this week, DPL and its subsidiaries comprising world class hand protection manufacturing companies and plantations reported a turnover of Rs 7,109 million, up 16 per cent over 2004-05, with revenue from the Hand Protection sector growing 18 per cent and 10 per cent in the Plantation sector.

DPL's hand protection business in particular weathered a 10-year high in rubber prices which resulted in inflated production costs. All sectors of the business were affected by higher energy costs, wage increases and margin erosion due to an unrealistic exchange rate. The plantations were adversely impacted by sluggish tea prices and higher taxation.

Additionally, start-up losses at DPL's maiden venture in Thailand for the manufacture of medical gloves affected the Group's bottomline.

Consequently, profit before tax at Rs 415 million represented a decrease of 33 per cent over the previous year's Rs 621 million, after discounting the extraordinary profits earned in that year from the sale of shares. Profit attributable to the company declined 41 per cent to Rs 286 million.

Nearly half the decline in profits is attributed to the loss of Rs 103 million incurred by Dipped Products Thailand Limited (DPTL) in its first year of manufacture of medical gloves.