Royal Ceramics Lanka PLC has posted its best year on record. Since its founding 18 years ago but announced that it is not post able to declare any dividend for the year due to strategic investments that have been made specially in a pioneer bath ware manufacturing company, Rocell Bath ware Limited, where the new factory has now been completed. The company’s chairman Mr. Weerasinghe reported that a profit after tax of Rs.810.8 million had been achieved, a notable increase from the previous year’s Rs.329 million and group net assets per share were up to Rs.47.90 from the previous year’s 29.49. Group earnings per share were up to 85% to Rs.11.108 from Rs.94 the previous year and the company’s brand image has grown excellently, he said.
The company’s management director , Mr. Nimal Perera focused on spiraling energy cost, an area of major concern, given that 40% of their manufacturing cost was extended on energy. ‘’Being an energy incentive industry. This is naturally the primary cost component and needs to be managed efficiently and effectively in order to ensure that our costs are kept at manageable levels’’, he said.
Mr. Perera also said that they had a problem in obtaining quality ball clay, their major raw material due to various state restrictions that have tented to push prices upwards.He said that the company’s greatest achievement during the year under review was the completion of a bath ware production facility where trail production was now on. They expected the factory to be fully commissioned by the middle of this year and enter the market ‘’with complete bath ware solutions’’.
‘’Rocell Bath ware will notch yet another first as being the only Sri Lankan company to venture into the challenging field of manufacturing here in Sri Lanka’’, Mr.Perera said. Reporting while the company continued to enjoy the taxation benefits granted under a BOI agreement. He stressed that the availability of quality ball clay was ‘’one of the biggest problems we continue to face’’.
Royal Ceramics has a stated capital of Rs.814.7 million, reserves of Rs.418.4 million and retained earnings of Rs.430.7 million in its books. Interest bearing loans and borrowings at Rs.526.3 million in the company’s biggest non-current liability along with deferred tax liabilities of Rs.85.5 million and a retirement benefit obligation of Rs.44.8 million.
Mr Dhammika Perera, the BOI chairman , owns a controlling 51.20% of the company followed by the chairman (10.22%) and Ceybank Unit Trust (8.36%).
The Royal Ceramics share traded at a high of Rs.45 and a low of Rs.26 during the year under review against a trading range of Rs.47 to Rs.30.50 the previous year.
(SOURCE : Sunday Times, Business Section - June 08, 2008)