Haycarb records Rs 8.5 b sales, Rs 724 m PBT in 2011/12
The world's leading coconut shell based activated carbon manufacturer
and exporter, Haycarb PLC has sustained performance in the fourth
quarter of 2011-12 despite challenging external conditions and rising
production costs to end the year on a positive note.
According to interim statements filed with the Colombo Stock
Exchange, volume increases and continued focus on value added carbons
enabled the Hayleys Group company to increase revenue by Rs 2.1 billion
or 33 percent to Rs 8.5 billion for the 12 months to 31st March 2012.
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Mohan Pandithage
Rajitha Kariyawasan |
Profit before tax at Rs 724 million was on par with that of the
previous year, principally due to the impact of high raw material prices
in the first 9 months, resultant market conditions and rising conversion
costs and overheads, the company said. Net profit for the year improved
by a marginal 3 percent to Rs 590 million, and profit attributable to
equity holders of the company increased nearly 7 percent to Rs 539
million.
Describing the environment in which these results were achieved as
“very challenging,” Haycarb and Hayleys Chairman Mohan Pandithage said
the Haycarb Group had consolidated and sustained its performance. “The
consolidated profit of Rs. 724 million was achieved in the face of
unprecedented increases in the price of the primary raw material,
coconut charcoal, in all manufacturing locations,” he said, explaining
that the Haycarb Group adopted bold initiatives in its procurement
strategy to ensure continuity of raw material supplies even at
significant cost penalties during the first half of the year to retain
the confidence of strategic and loyal customers across the globe.
Haycarb Managing Director Rajitha Kariyawasan said that the FY
2011-12 result was noteworthy in the context of the challenging
conditions and the external market dynamics. “The unprecedented crisis
affecting its key raw material with severe shortages and the resultant
sharp increase in the prices, was a major challenge for the Group to
reckon with,” he said.
“An increase in furnace oil prices in February 2012, combined with a
hike in January of electricity tariffs and wage increases that came in
to effect in the last quarter, will impose an additional estimated cost
of over Rs 175 million per annum. The significant devaluation of the Sri
Lankan currency will help us to offset some of these cost challenges in
Sri Lanka, our largest manufacturing base,” he said.
“We invested significantly in working capital, in building raw
material inventory that enabled us to provide supply stability of
activated carbon to our loyal customers ensuring stable customer pricing
in the last quarter,” he said.
“The demand outlook for Haycarb's high quality activated carbon from
all our facilities remains strong. With maximum capacity utilization we
are concentrating more and more on high value and high margin products,
applications and strategic customers, providing a much better value
proposition,” Kariyawasan added.
He disclosed that a capital expenditure programme totaling Rs 782
million encompassing value addition projects, capacity enhancement,
plant upgrades and the implementation of SAP Enterprise Resource
Planning (ERP) system would generate significant returns for the Haycarb
Group in coming years.
Besides the introduction and successful implementation of SAP ERP
system across the Group in Sri Lanka, highlights of the year included
the accreditation and issuance of carbon credits for the Group's Recogen
plant at Badalgama for carbon trading under the Kyoto Protocol and the
commissioning of ‘Lakdiyatha Passikudah’ a central sewage and waste
water treatment plant built for the National Holiday Resort at a cost of
Rs 185 million in partnership with Veolia Water India as the first Build
Operate and Transfer (BOT) project in the waste water treatment sphere.
“We plan to invest further in expanding our supply chain by setting
up new plants in Indonesia and India. We will also focus on geographic
market expansion and key customer account enhancement to achieve the
ambitious growth targets set for the next four to five year period,”
Kariyawasan said.
The new value added carbon range and key initiatives to enter the
Super Capacitor carbon market as an active player remains a high
priority, he disclosed. Puritas Pvt Ltd, Haycarb's Water Purification
Systems Company will target an aggressive growth leveraging on the
strategic partnership with Veolia Water. |