Drop in demand for graphite in U.S. and Europe
Bogala Graphite Lanka PLC has closed what its chairman, Mr. Vijaya Malalasekera has called a "rather challenging year" ended December 31, 2015, breaking even with a marginal net profit of Rs. 0.2 million, down from Rs. 74.5 million a year earlier, due to a drop in demand for their products in Europe and the U.S. and a volatile Euro.
But he had said that the situation had looked up in the last quarter of the year and he was optimistic of a turnaround in the current financial year.
The chairman reported that despite a 50% increase in demand from the Far Eastern market compared to 2014, the substantial decline in demand from Europe, UK and the US markets and from their (German) parent company had pushed down revenue to Rs. Rs. 583 million from Rs. 607 million the previous year.
Also the product mix had changed with low margin graphite being more in demand compared to graphite that would have sold at higher margins. The drop in demand from the Middle East market too had added to their woes.
"In summary the performance during the year has been disappointing for the company when compared to earlier years," he said. "The primary factor appears to be the lack of sales that have not been forthcoming though anticipated during our budgeting process."
He reported that internationally there had been a reduction in prices of commodities and the minerals market has declined significantly. The management was taking steps to ensure better sales in a challenging environment.
Bogala CEO Amila Jayasinghe said that despite the setbacks, they were heartened by their ability to post a profitable last quarter during the year under review and they would be entering the new financial year on a positive note, better placed to respond to opportunities and challenges that may arise.
They were playing close attention to the activities of their competitors and potential new players in the country’s graphite industry. Given their resources and strategic advantages, they believed they were favorably positioned to meet the challenges ahead.
Their decision two years ago to open the Rangala mine whose accessibility makes it very competitive has paid off with the mine continuing to produce well with a capacity to produce 200 MT per year – an area of potential profit which they planned to exploit.
The year under review had seen the company moving to the Diri Savi board of the Colombo Stock Exchange and capitalizing reserves to give shareholders a one for one bonus shares pushing up the stated capital of the company from Rs. 80 million to Rs. 102 million.
Graphit Kropfmuhl GMBH (79.58%) and Alterna GK LLC (10.33%) are the main shareholders of Bogala with the Secretary to the Treasury owning 0.54%.
The directors of the company are Messrs. Vijaya Malalasekera (Chairman), Frank. E. Berger, Jayampathi Jayasinghe, Thomas A. Junker, Amila Jayasinghe, Torben Muller, Ms. Coralie Pietersz, Sugath Amarasinghe and Mohamed Adamaly.
Bogala Graphite Lanka PLC has closed what its chairman, Mr. Vijaya Malalasekera has called a "rather challenging year" ended December 31, 2015, breaking even with a marginal net profit of Rs. 0.2 million, down from Rs. 74.5 million a year earlier, due to a drop in demand for their products in Europe and the U.S. and a volatile Euro.
But he had said that the situation had looked up in the last quarter of the year and he was optimistic of a turnaround in the current financial year.
The chairman reported that despite a 50% increase in demand from the Far Eastern market compared to 2014, the substantial decline in demand from Europe, UK and the US markets and from their (German) parent company had pushed down revenue to Rs. Rs. 583 million from Rs. 607 million the previous year.
Also the product mix had changed with low margin graphite being more in demand compared to graphite that would have sold at higher margins. The drop in demand from the Middle East market too had added to their woes.
"In summary the performance during the year has been disappointing for the company when compared to earlier years," he said. "The primary factor appears to be the lack of sales that have not been forthcoming though anticipated during our budgeting process."
He reported that internationally there had been a reduction in prices of commodities and the minerals market has declined significantly. The management was taking steps to ensure better sales in a challenging environment.
Bogala CEO Amila Jayasinghe said that despite the setbacks, they were heartened by their ability to post a profitable last quarter during the year under review and they would be entering the new financial year on a positive note, better placed to respond to opportunities and challenges that may arise.
They were playing close attention to the activities of their competitors and potential new players in the country’s graphite industry. Given their resources and strategic advantages, they believed they were favorably positioned to meet the challenges ahead.
Their decision two years ago to open the Rangala mine whose accessibility makes it very competitive has paid off with the mine continuing to produce well with a capacity to produce 200 MT per year – an area of potential profit which they planned to exploit.
The year under review had seen the company moving to the Diri Savi board of the Colombo Stock Exchange and capitalizing reserves to give shareholders a one for one bonus shares pushing up the stated capital of the company from Rs. 80 million to Rs. 102 million.
Graphit Kropfmuhl GMBH (79.58%) and Alterna GK LLC (10.33%) are the main shareholders of Bogala with the Secretary to the Treasury owning 0.54%.
The directors of the company are Messrs. Vijaya Malalasekera (Chairman), Frank. E. Berger, Jayampathi Jayasinghe, Thomas A. Junker, Amila Jayasinghe, Torben Muller, Ms. Coralie Pietersz, Sugath Amarasinghe and Mohamed Adamaly.
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