New Delhi, India — Consolidated sales at Sheela Foam rose by 10% to INR 4.59 bn ($ 71.9m) in the first quarterly of its 2018 financial year.
While sales were up 10% compared to the same quarter in 2017, the cost of materials consumed rose 15% to INR 2.28 bn compared to INR 1.79 bn in the 2016 quarter. The company reported profit before tax of INR 400 m, down 20% on the INR 500 m reported in the first quarter of 2017.
Sheela said that in the first quarter sales in India were much lower as dealers liquidated stocks before the implementation of GST. The firm warned in June last year that GST could hit short term performance once implemented.
The firm added that the price of TDI ranged between INR 118/kg and INR 231/kg in the first quarter of 2017. In the first quarter of 2018, price of TDI range between INR 260 and INR 242.5 /kg.
Revenue from Joyce Foam operations in Australia in the first quarter of 2018 were INR 720 m compared to INR 840 m in the first quarter of 2017. Joyce has been 100% owned by Sheela since 2005.
Joyce net profit of the first quarter of 2018 was INR 10 m compared to INR 70 m in the first quarter of 2017. The company lost a bed-in-a-box customer to competition, Sheela said explaining the year-on-year difference. Volumes, Sheela said, are expected to be filled in a few months. Additionally, rising TDI prices are being passed on to customers.
Sheela said that during the first quarter of 2018 the Indian TDI price started declining slowly.
The GST was implemented on 1 July 2017 with the rate for foam and spring mattresses at 28%, coir mattresses and foam sheet are both 18%, Sheela said.
One of Sheela's plants operates in Kala Amb, Himachal Pradesh, is exempt from GST and Sheela is waiting for a refund of GST on mattresses produced there.