Bogala posts small loss attributable to suspension of mining & downsizing



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Bogala Graphite PLC, a Colombo listed company nearly 80% owned by Germany’s Graphit Kropfmuhl GMBH which is a major player in the global graphite industry, has posted a small after-tax loss of Rs. 19.7 million in the year ended Dec. 31, 2017, down from a profit of Rs. 73.8 million a year earlier due to an underground accident early in the year under review leading to the loss of the life of a miner "who had not followed mandatory instructions," the company’s recently released annual report reveals.


"Bogala has paid the obligatory compensation to the affected family," the company’s chairman, Mr. Vijaya Malalasekara has said in the report. In addition to that we voluntarily agreed with the Commissioner of Compensation to pay the deceased’s salary until his age of retirement to the family."


Although these payments will be made on a monthly basis, the full impact has been debited to the 2017 accounts, the report said.


"As a consequence of this accident, the Geological Surveys and Mines Bureau conducted an independent evaluation of the incident. As a result, we could not operate the mine as planned leading to a loss in ROM and a related negative impact on our financial results," Malalasekara explained.


"This limitation was lifted only after a report was issued by the University of Moratuwa who are experts in assessing the safety measures necessary when mining activities are taking place. This report exonerated the company from any blame whatsoever and stated that the safety measures adopted by the company are well above the expected norms."


The limitations had been in force from January to early June 2017 affecting Bogala’s ability to mine as planned during the first half of the year. Despite this, the company had achieved a turnover of Rs. 732 million during the year, up from Rs. 702 million despite a depreciating rupee during the year.


Malalasekara said that the year’s loss was attributable to the accident and the introduction of an early retirement scheme costing Rs. 67 million to right-size the workforce and management.


Bogala CEO Amila Jayasinghe said that the year under review saw a loss per share of 21 cents against the previous year’s profit per share of 78 cents the previous year.


"Despite encountering major challenges during the year under review, our consistent business focus, with the support of our parent company, along with the commitment of our work force enabled the company to attain its performance goals,’ Jayasinghe said.


"It is critical for us to increase our production and productivity whilst minimizing costs particularly in an environment where demand appears to be increasing"


The controlling shareholder of Bogala is Graphit Kropfmuhl GMBH (79.58%) followed by Alterna GK LLC (10.33%). All other shareholders including the Secretary to the Treasury (0.54%) own less than one percent.


The Bogala share traded at a high of Rs. 17.60 and a low of Rs. 11 closing at Rs. 13.30. Over 2 million shares traded during the year in 1,812 trades.


The directors of the company are Messrs. Vijaya Malalasekara, Thomas. A. Junker, Jayampathy Jayasinghe, Roger Miller, Amila Jayasinghe, Torben Muller, Coralie Pietersz, Sugath Amarasinghe and M. Adamaly.


 


 
 
 
 
 
 
 
 
 
 
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