Overseas operations keep Haycarb on target in 3 Q
Continuing strong contributions from overseas operations and higher
prices for its products have helped Haycarb PLC to cope with pressure on
its local manufacturing operations in the nine months ending December
31, 2008, enabling the Hayleys Group’s activated carbon manufacturing
business to stay on target in unfavourable conditions.
A shortage of coconut shells for conversion to charcoal, its main raw
material in Sri Lanka, has resulted in production falling by 12 per cent
in the review period, but the Group comprising manufacturing operations
in Sri Lanka, Thailand and Indonesia has posted a turnover of Rs. 3.4
billion, a growth of 12 per cent over the corresponding period of the
previous year.
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A Haycarb
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Local manufacturing continued to be pressured by higher prices for
local inputs, particularly raw materials, resulting in the Group’s Cost
of Sales growing 17 per cent to Rs 2.6 billion and significantly eroding
margins, the company said.
In results released to the Colombo Stock Exchange this week, Haycarb
reported that profit before tax had declined 19 per cent to Rs 226
million while profit after tax, including gains from discontinued
operations, had dipped 20 per cent to Rs 184 million. However, since the
post tax profit of Rs 230 million reported in the corresponding nine
months of 2007-08 had included an extraordinary capital gain of Rs 66
million, the Group’s bottom line performance for the period under review
reflects an improvement of 12 per cent after discounting capital gains
of the previous year.
Commenting on these results, Haycarb Managing Director Ananda
Hettiarachchy said, “Our Sri Lankan operations are facing extremely
tough conditions but we are cautiously optimistic that our operations in
Indonesia and Thailand will to some extent mitigate the impact of
unrealistic exchange rates, high inflation and raw material shortages in
Sri Lanka.”
Notable among the positive developments at Haycarb was the Group’s
ability to reduce net finance costs by 71 per cent to Rs 23 million in
the nine months reviewed and to contain the growth of administrative
expenses to 5 per cent.
“A great deal has been done to counter the adverse factors beyond our
control with tighter management,” Hettiarachchy said.
Incorporated in 1973, Haycarb is the pioneer manufacturer of
activated carbon in any coconut producing country with an installed
capacity of more than 22,000 MT per annum. The company has marketing
offices in UK, Australia and USA. Its product range covers standard,
washed and impregnated carbons in granular, pellet and powder form.
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