Richard Pieris operating profit grows 91% to Rs. 465m in 1Q, 2007
The Richard Pieris group recorded a turnover of Rs. 4.6 bn for the
first quarter ending June 30, 2007, an increase of 26% compared to the
previous year. Group operating profits increased by 91% to Rs. 465mn
during the same period.
This comparison excludes the non recurring capital gain of Rs. 232mn
arising through the relinquishment of leasehold rights in the plantation
sector during the first quarter of 2006/2007.
Plantations, Retail, Plastics and the turnaround of the Tyre Sector
contributed positively towards this growth. However, profit after tax
reduced to Rs. 112mn due mainly to high finance cost. Profits
attributable to the equity holders of the parent amounted to Rs. 60mn.
The Rights Issue launched last month is expected to raise
approximately Rs. 1 bn and will be used entirely to reduce the bank
borrowings of the group. The interest savings will have a positive
impact on profitability.
The Plastics and Distribution sector continued to record satisfactory
performance with an operating profit of Rs. 67mn, being 134% higher than
last year.
A new warehouse in Mattegoda and two factories in Horana are expected
to be commissioned by November 2008 to augment capacity and to replace
the Mattegoda factory that was damaged by fire in October 2006.
The Tyre sector recorded an operating profit of Rs. 33 mn compared to
an operating loss of Rs. 16.6 mn in the corresponding period last year.
The initiatives to increase turnover, improve margins, reduce overheads
and expand the product portfolio, including obtaining the dealership for
Birla tyres of India, has contributed positively to improve results.
The Retail sector continued its steady progress recording an
operating profit of Rs. 91mn which was 10% higher than the previous
year.
Additional resources will be allocated to expand the Arpico
supercentre network in strategic locations to maintain the growth
momentum. |