Dipped Products PLC (DPL) has posted revenue and profit growth in the first quarter of the current financial year ended June 30, 2008 with turnover up 15% to Rs.2.9 billion from a year earlier and the group profit after-tax up 13% to Rs.153 million.

This was despite their hand protection business seeing profits decline sharply as a result of very high latex prices. The lag had been caught up by Kelani Valley Plantations, a DPL subsidiary.

DPL's Managing Director J.A.G. Anandarajah said that their medical glove business in Thailand has increased first quarter production by 6%, boosted income by 22% and reduced losses to Rs.32 million from Rs.43 million a year earlier.

The DPL group has significant interest in plantations with Kelani Valley Plantations Limited (KVPL) posting a strong first quarter on the back of excellent tea and rubber prices.

In a Stock Exchange filing last week, KVPL said that turnover was up 34% to Rs.1.7 billion and the after-tax profit up 71% to Rs.226 million.

Tea had been the major contributor to revenue growth with production up sharply from a year earlier when the crop slumped due to disruptions caused by trade union action.

Good rubber prices too had helped the bottom line, DPL said.

Anandarajah said that DPL’s profits from its local glove manufacturing operations had dipped 76% over the corresponding period the previous year due to soaring latex prices, escalating energy and other input costs, rising domestic inflation and a static rupee.

He was however optimistic that with international buyers agreeing to price increases, results in the second quarter would be better.

"The market accepts price increases necessitated by global factors like the weaker dollar and higher rubber and fuel prices," he said. "Our concern is that cost increases arising from local inflation could continue to impede margins."