Century Plyboards (India) Ltd has revised its outlook for FY20 and is now expecting to grow at 6 per cent this fiscal. The plyboards and laminate-maker had earlier expected a “double-digit growth”.

The downward revision came on account of the current economic slowdown and the new initiatives taken by the company.

According to Keshav Bhajanka, Executive Director, Century Plyboards, the company should track 10 per cent growth next fiscal (FY21) with the business initiatives gaining ground.

While some initiatives like increasing distribution and pushing its mass brand, ‘Sainik’, have already been implemented, the company has also been working on reducing focus on the commercial veneer segment.

For the first nine months of the current fiscal (April to December), there has been a near 40 per cent year-on-year decline in turnover from the segment at ₹37 crore (from ₹61 crore in April-December 2018).

“It is conscious decision to reduce dependence on commercial veneer; especially since the segment is not profitable because of increased competition from Gabon (Africa) and Indonesia. Growth has been subdued in Q3 (October-December) and is expected to be decent in Q4 (January-March). However, with different business initiatives being taken up, we should be back to 10 per cent growth in FY21,” he told BusinessLine .

Century Ply reported a standalone net profit of ₹19.09 crore in the quarter ended December, down 54 per cent over the corresponding year-ago period. Net revenue from operations for the quarter was over ₹595 crore, an increase of of 3 per cent year on year.

Laos arm

The company’s Q3 earnings also took a hit on an impairment loss of ₹46 crore on its investment in the Laos subsidiary. The loss was primarily on account of restrictions on production of semi-finished products imposed by the government there.

According to Bhajanka, the production prohibition has been in place for nearly two years now. Since there were no immediate signs of withdrawal of these restriction, it was decided to write-down investments in the subsidiary.

Growth in other sectors

Verticals like laminates, plyboards, MDF and particle board are witnessing growth.

Laminates witnessed a near 12.5–13 per cent growth for the first nine months of the current fiscal. Plyboards turnover grew 9 per cent in the December quarter and for the first nine months, the combined the growth in plyboards’ turnover was 3 per cent year-on-year.

“The first two quarters (Q1 and Q2) were flat for plyboards, while Q3 witnessed growth,” Bhajanka said.

According to him, the MDF segment saw 5-6 per cent price rise recently and margins have improved to 24 per cent (as against 12 per cent a year-ago). The particle-board segment saw 5 per cent revenue de-growth with the Chennai plant suffering a break-down and there being a subsequent upgrade.

“Particle board as a whole is witnessing consistent growth,” he added.

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