PTL affirms its operational stance remains strong

Monday 28 February 2011 17:34
Polyplex (Thailand) Plc (PTL), one of Thailand’s leading packaging film producers, said that its operations and financials continue to remain strong contrary to the rumors that have been circulating in the market.

“PTL remains financially and operationally very strong,” Managing director Rohit Vashistha said in a response to the queries raised by some investors.

Mr. Vashistha said that “These rumors have eroded shareholder’s value and we would request the authorities in the market to investigate the source of such baseless dissemination of information.”

“The company continues to build on its leadership position in regional and other key markets. Its confidence in the business is evident from its ongoing investments aggregating to more than USD 170 million in new film lines as well as in downstream value added products,” he said in a statement to the Stock Exchange of Thailand (SET).

Meanwhile the parent company of PTL, Polyplex Corporation Plc (PCL), which holds a majority stake in PTL, said that its financial standing was very strong and that the firm had no financial problems that prompted it to divest its holdings in PTL, as has been rumored. PCL had decided to disinvest a part of its stake in PTL, which it has held since 2002, in order to unlock resources to fund the various growth opportunities, both organic and inorganic, that it has been evaluating and to generate capital to position itself strategically to avail of such opportunities.

PCL has reported a sharp increase in its profits over the past 9-months (financial year ends in March 2011). The India based firm reported a net profit for the 9-monhts ending December 2010 at 7.52 billion Rupee (5.08 Billion Baht) against 940 million Rupee (636.19 Million Baht) for the same period last year.

PLC’s debts have also seen a significant drop with its leveraging remaining at 1.18 times (down 53% since March 2010). The parent firm’s cash balances have also grown by 410%, which all point to a very healthy financial position.

“PCL would like to reaffirm its complete confidence in the plastic film business and commitment to maintaining a leadership position in the global PET film industry, as also its fullest support to PTL, its subsidiary company in which PCL would continue to hold a majority interest,” Pranay Kothari chief executive officer of PCL said in a statement as well.

Commenting on the issue of the imposition of a recent ban by the Government of India on use of plastic films in sachets for packing gutka, tobacco and pan masala, he said that an appeal has been filed by the various affected industries in the courts and would finally be decided in due course.

“While it is true that this ban, as long as it remains, is an adverse development for the domestic Indian plastic film industry, the impact on PCL would be limited as this segment contributes less than 10% of its sales revenue and can be compensated by exports / growth in the domestic market over a relatively short period of time,” he added.