Ghani Glass Limited has just seen an exceptional FY15 both regarding its top line and bottom line. During the period under discussion, the growing demand for glass products, tough cost control measures, and recent capacity expansion have provided all the right ingredients for decent growth. With all these ingredients, the company has able to grow its top line by 10 percent in year-on-year comparison. Even with the higher sales the company was able to control its core cost and this has helped Ghani to increase its gross profit margin by 500 bps.
Management has implemented Cost Reduction Programs (CRPs) at various levels of operations that have been largely successful in controlling expenses. Despite a strong increase in sales, the administrative was well under control and the distribution costs have declined notably. These measures helped the company to improve the operating profit margin by 600 bps.
The company has also witnessed better performance by the associated companies like RAK Ghani Glass LLC and received significantly improved share of profit. The higher top line along with decent other income has helped the company to score the highest bottom line in last five years.
1QFY16
During 1QFY16 the company shows a slight decline in its top line but that has more to do with seasonality than with anything else. At the same time, the company has reported a sizeable increase in its bottom line. The core cost has come down, and the company should be thankful for the decline in global commodity prices. This time around the business was unable to utilize its cost control measures because the administrative expenses have increased.
Ghani Glass Limited has become one of the leading brand names in glass and glass related products both in volume and quality. Moving forward, the company will see the higher demand for both the float glass and glass bottles. The recent expansion of new production line that has increased the capacity by 500 million bottles would certainly provide a leading edge for Ghani, and that is why Ghani Glass Limited (GHGL) is tapping big players in FMCG and pharma sector. Also, the demand for float glass will certainly go up mainly due to the public development under PSDP as well as growing private sector construction.
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