Chairman optimistic despite thin year at Ceylon Glass

The Ceylon Glass Co. Ltd., the country's only manufacturer of glass containers, has seen its post tax profit plunge by 51% despite a turnover increase of 9% in the year ended March 31, 1998, shareholders have been told.

The year under review saw turnover rising to Rs. 560.8 million from Rs. 512.9 million the previous year. But the operating profit dropped to Rs. 73.5 million from the previous year's Rs. 108.6 million. Other income too was down to Rs. 0.3 million (Rs. 5.5 million a year earlier). Interest cost was down to Rs. 41.7 million from the previous year's Rs. 48.9 million. The pre-tax profit of Rs. 32 million was half the previous year's Rs. 65.2 million. As in the previous year, there was no tax liability due to adjusted tax losses.

The company's chairman, Mr. E.M. Wijenaike, has told shareholders that stringent cost controls are being exercised in all areas of operation in a bid to improve profitability. Long-term debts too have been restructured by the issue of 3-year debentures and tradable promissory notes.

Wijenaike complained that the existing economic and fiscal policies are more supportive of trading and services than industrial value addition. The company had therefore been actively lobbying for strict anti-dumping laws and monitoring systems to protect local industries from these threats.

Ceylon Glass has previously complained about competition from imported glass containers from India.

The chairman noted that theirs was the first manufacturing company to issue a quoted debenture. The fact that the issue was over-subscribed showed overwhelming investor confidence in the company.

"This (debenture issue) has helped the company to reduce its cost of long term funds which will definitely mean an improvement in performance in coming years. We are also looking for ways of rationalizing prices of all products with added value to customers,'' Wijenaike said.

The company which is now 43-years old suffered two heavy losses in 1994 (Rs. 95.6 million) and 1995 (Rs. 81 million). This was followed with a profit of Rs. 87 million in 1996 and indications were that substantial investments made in upgrading the plant and overcoming labour problems was finally paying off. But profits have declined sharply in the two succeeding years.

The directors of the company are Messrs. E.M. Wijenaike (chairman), Dr. C.T.S.B. Perera (managing director), S.E. de Silva, I.O.K.G. Fernando, T. Inoue, J.M.C.R. Jayasinghe, U.N. Jinasena and M.R. Prelis.