Dankotuwa turns losses into modest profit

After two years of losses Dankotuwa Porcelain saw a turnaround in the first quarter of 2007 with a modest profit. It recorded an after tax profit of Rs. 7.1 Million for the first nine months of 2007.

This is in contrast to the loss of Rs. 112.7 Million for the corresponding period in 2006.

Turnover during this period increased 11% over the corresponding period in 2006, while manufacturing costs have declined. In Dollar terms too the turnover increased but the major increase was from the depreciation of the Rupee.

The Company in a recent letter to the Colombo Stock Exchange (CSE) stated that the Board has decided to revalue the land as per the Sri Lanka Accounting Standard SLAS 18 (Revised 2005) and accordingly the value of the land has increased by 227% to Rs. 133,997,000 which will be reflected in the balance sheet as at December 31, 2007. This has led to a revaluation surplus of Rs. 92,997,000.

Dankotuwa is a BOI Company and is mainly export oriented with 85% of its production being exported to over 25 countries. Dankotuwa was also awarded the most prestigious highest Presidential Export Award last year.

"The order situation has considerably improved due to a number of reasons said Chairman/Managing Director, Sunil G. Wijesinha commenting that the financial recovery, improvement in timely deliveries and improvements made to the factory have induced more confidence among the buyers.

The period when we made losses caused some concern to the foreign buyers because they were unsure about their future supplies, but now we are past that, and the buyers are now increasing their orders."