BPPL Holdings announced today its unaudited financial results for the three month period April to June 2022. Net earnings for the quarter were Rs.300 million or Rs. 0.98 per share, up by 188% compared to the corresponding period in the previous year where the net earnings were Rs.104 million or Rs.0.34 per share.

YoY revenue growth was 58% in Rupee terms to Rs1.6 billion.

The net earnings increase for the period was due to a combination of the increase in revenue and gross profit margins. Gross profit margins improved to 39% during the period from 29% in the same period the previous year due to product price increases in Jan’22, recommencement of local sourcing of both timber and PET bottles following the lifting of COVID related travel restrictions earlier this year and the effects of steep Sri Lankan Rupee depreciation in March ‘22.

Group distribution costs largely relating to freight, shipping and related costs, though a higher 8.3% of revenue during the period vs 7.6% during the corresponding period in the previous year, have now started to come down in line with falling global freight rates.

Other income continued to grow as was also seen in the Jan-Mar ’22 period by 327% to Rs.11 million following the commissioning of several solar power generation plants earlier this year where solar capacity increased to 2.2MWs from 347KWs.

There were exchange gains of Rs.67 million during the quarter as the Sri Lankan Rupee continued to depreciate in the months of April and May.

Depreciation charges increased by 39% with the completion of Phase 2 of the Yarn expansion program during the Jan- Mar ’22 quarter. Finance costs grew four fold following the Yarn phase 2 expansion, interest on term loans taken for the solar projects, higher working capital needs due to significant delays in shipment arrival (to Sri Lanka) and transit times and US Dollar interest rate increases.

I’m also pleased to say that our staff worked tirelessly to overcome a very challenging operating environment due to limited fuel supplies and electricity cuts during the reported period. Electricity supply for continuous operations was barely managed with the help of fuel supplies from private sector operators who had to be paid in hard currency.

We also provided fuel where possible to some key raw material suppliers for them to carry on their work. However, some secondary suppliers were affected by the fuel crisis.

We are making steady progress with obtaining the necessary regulatory approvals for the pending US Dollar 15 million, 10 year term loan from the United States Development Finance Corporation. Disbursement of funds are expected to commence later this year and will be obtained in three tranches over a four year period.

- Dr. Anush Amarasinghe
Managing Director / Chief Executive Officer