Kelani Tyres PLC has seen a decline in profitability in the year ended March 31, 2017, attributed by it chairman, Mr. Chanaka de Silva to increased raw material prices that pushed down the operational profit of its production Joint Venture (with India’s Ceat) to an after-tax Rs. 1.3 billion from the previous year’s Rs. 1.6 billion.
He has said in the recently released annual report of the company that the year under review had been "very challenging" with over two years of stable and relatively low raw material prices ending in the first quarter of the year under review.
"Our cost of natural rubber increased by approx. 22% during the year in tandem with significant increases in synthetic rubber prices as well," he reported. "In fact, prices of all other raw materials too appreciated during the year under review."
This had resulted in an adverse effect on margins "when our prices were already under pressure from imported tyres flooding the market."
"The intense price competitiveness internationally affected our export sales as well, which fell by around 15% compared to the previous year," he said.
Production for the year at over 15.4 million MT was flat but export earnings had gained slightly to Rs. 2.44 billion from the previous year’s Rs. 2.39 billion.
He said the Joint Venture (JV) hoped to take many strategic decisions to strengthen its market position which would have a positive impact on Kelani. The JV would expand on new sizes and has also been looking at manufacturing truck radials here. There was a distinct possibility of this happening enabling the JV to cater to the total requirement of pneumatic tyres in Sri Lanka.
De Silva said the Ministry of Finance had been supporting them to work towards their prime objective of total import substitution of pneumatic tyres in Sri Lanka with quality products on par with the best tyre brands in the world.
He announced an interim dividend of Rs. 2.50 (net) per share on the performance of the company in the year under review and the subsequent dividend received from the JV. This would involve a Rs.201 million payout.
On June 30, 1999, Kelani transferred its tyre manufacturing assets to a joint venture company, CEAT Kelani Holdings (Private) Ltd. (CKH). Kelani owns 50% of CKH.
Kelani Tyres has a stated capital of Rs. 402 million and total assets of Rs. 4.19 billion. Total liabilities run at Rs. 52.8 million.
Silverstock Ltd. with 43.7% of Kelani is its top shareholder followed by the Ceybank Unit Trust (10%). Ceybank Century Growth Fund, EPF and the Bank of Ceylon are among its top ten shareholders.
The Kelani share traded during the year under review at a high of Rs. 77.40 and a low of Rs. 52.20 closing at Rs. 55. This compared with a trading range of Rs. 89 to Rs. 59 closing at Rs. 64.
The directors of the company are: Messrs. Chanaka de Silva, Rohan. T. Fernando, T. Bevan Perera, Kamantha Amarasekera, Ms. SS Jayatilaka, Eraj Fernando and RP Weerasooria.
He has said in the recently released annual report of the company that the year under review had been "very challenging" with over two years of stable and relatively low raw material prices ending in the first quarter of the year under review.
"Our cost of natural rubber increased by approx. 22% during the year in tandem with significant increases in synthetic rubber prices as well," he reported. "In fact, prices of all other raw materials too appreciated during the year under review."
This had resulted in an adverse effect on margins "when our prices were already under pressure from imported tyres flooding the market."
"The intense price competitiveness internationally affected our export sales as well, which fell by around 15% compared to the previous year," he said.
Production for the year at over 15.4 million MT was flat but export earnings had gained slightly to Rs. 2.44 billion from the previous year’s Rs. 2.39 billion.
He said the Joint Venture (JV) hoped to take many strategic decisions to strengthen its market position which would have a positive impact on Kelani. The JV would expand on new sizes and has also been looking at manufacturing truck radials here. There was a distinct possibility of this happening enabling the JV to cater to the total requirement of pneumatic tyres in Sri Lanka.
De Silva said the Ministry of Finance had been supporting them to work towards their prime objective of total import substitution of pneumatic tyres in Sri Lanka with quality products on par with the best tyre brands in the world.
He announced an interim dividend of Rs. 2.50 (net) per share on the performance of the company in the year under review and the subsequent dividend received from the JV. This would involve a Rs.201 million payout.
On June 30, 1999, Kelani transferred its tyre manufacturing assets to a joint venture company, CEAT Kelani Holdings (Private) Ltd. (CKH). Kelani owns 50% of CKH.
Kelani Tyres has a stated capital of Rs. 402 million and total assets of Rs. 4.19 billion. Total liabilities run at Rs. 52.8 million.
Silverstock Ltd. with 43.7% of Kelani is its top shareholder followed by the Ceybank Unit Trust (10%). Ceybank Century Growth Fund, EPF and the Bank of Ceylon are among its top ten shareholders.
The Kelani share traded during the year under review at a high of Rs. 77.40 and a low of Rs. 52.20 closing at Rs. 55. This compared with a trading range of Rs. 89 to Rs. 59 closing at Rs. 64.
The directors of the company are: Messrs. Chanaka de Silva, Rohan. T. Fernando, T. Bevan Perera, Kamantha Amarasekera, Ms. SS Jayatilaka, Eraj Fernando and RP Weerasooria.
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