Haycarb reports Rs 548 m pre-tax profit

Haycarb PLC, the Hayleys Group’s value-added activated carbon manufacturer, has reported a pre-tax profit of Rs 548.4 million for the nine months ending December 31, 2010, on a consolidated turnover of Rs 4.7 billion.

Group turnover improved by a healthy 27 percent over the corresponding period of last year, due to the strong demand for activated carbon and maximum capacity utilization in the nine months reviewed. However, the net profit of Haycarb’s Sri Lankan operations for the third quarter reflected a decline of 17 percent over the corresponding quarter, principally as a result of higher charcoal prices and the appreciation of the local currency against the US Dollar, the company said. Due to the acute shortage of charcoal locally the company was compelled to import 55 percent of its total requirement.

Profit attributable to equity holders of the company recorded a nominal growth to Rs 393.9 million for the period.

“The continuing increase of charcoal purchase prices could not be passed on to customers, and exerted significant pressure on our bottom line,” Haycarb Managing Director Rajitha Kariyawasan said. “However, the strong performance of overseas subsidiaries, maximization of throughput and our focus on value added products enabled the company to mitigate this exposure to some extent,” he said. He said that the significant appreciation of local currencies in Indonesia and Thailand against the US Dollar and an increase of furnace oil cost in Sri Lanka also contributed to a reduction in the gross margin of the group.

The pioneer manufacturer of activated carbon in any coconut producing country, Haycarb is also the world’s largest producer of coconut shell-based activated carbon. The group, whose manufacturing facilities in Sri Lanka, Thailand and Indonesia are supported by marketing offices in the UK, Australia and USA, produces standard, washed and impregnated carbons in granular, pellet and powder form.