High costs, low demand trim Sri Lankaâ€™s Haycarb profits
ECONOMYNEXT – Sri Lankan activated carbon manufacturer Haycarb PLC said September 2015 quarter net profit fell six percent to 122 million rupees from a year ago as raw material costs stayed high and demand depressed.
Sales fell seven percent to 2.6 billion rupees in the quarter, interim accounts filed with the stock exchange showed.
Quarterly earnings per share of the coconut shell-based activated carbon multinational fell to 4.12 rupees from 4.38 rupees the year before.
In the six months ending 30 September 2015, EPS fell to 8.67 rupees from 8.78 rupees the previous year.
Haycarb Managing Director Rajitha Kariyawasan said raw material prices in Sri Lanka stabilized in the first half of the year but were now increasing in India, Sri Lanka and Indonesia.
Haycarb had difficulty in sourcing enough raw material at competitive prices and faced “intense competition” in global markets due to the depressed gold industry and competition from low cost manufacturers from Philippines, India and Indonesia, he said.
It has launched initiatives to strengthen raw material supply chain networks and build partnerships through providing technology and funding of environment friendly charcoaling technology in Sri Lanka and overseas.
Initiatives last year targeting increases in throughput and energy saving impacted the bottom line favourably in the first half of the 2015/16 financial year, he said.
Haycarb said it estimates liability for a new one-off 25 percent Super Gains Tax imposed on firms whose profit exceeded two billion rupees in 2013/14 at 64.9 million rupees for the group. (Colombo/October 31 2015)