Haycarb's 2008-09 PAT up 23 percent to Rs. 279 m

Healthy profits from manufacturing companies in Thailand and Indonesia, locations with more favourable cost bases, and a strategic re-orientation across local and international operations have enabled Haycarb PLC, a leading producer of activated carbon derived from coconut shell, to post strong profit growth at group level in the year ending March 31, 2009.

Figures released by the Hayleys Group company to the Colombo Stock Exchange this week indicate that profit after tax grew 23 per cent to Rs 279 million on a turnover of Rs 4.5 billion, despite challenges that adversely affected local operations.

Haycarb Managing Director Ananda Hettiarachchy said local shortfalls in shell charcoal and a consequent 55 percent appreciation in price of this raw material had eroded gross profit margins, but the results from Thailand and Indonesia had helped absorb the impact to some extent. "Overall, it was a good performance in the context of the global recession and the difficult conditions that local manufacturing operations faced," he said.

Significant operational achievements in the year reviewed include restricting the escalation in cost of sales to 8 percent and reducing finance costs by a noteworthy 48 percent.

Among the challenges faced by the company in 2008-09, were the need to import charcoal for its Sri Lankan operations thereby increasing input costs, the inordinately high fuel prices in Sri Lanka, an unrealistic exchange rate and the global economic recession.

In response to these factors, Haycarb focussed on marketing value added products that enabled the Group to sell a product mix which resulted in increased earnings, through optimal utilisation of resources in its different manufacturing locations, Hettiarachchy said.