Sri Lankaâ€™s Haycarb March quarter net profit up 18-pct
COLOMBO (EconomyNext) – Sri Lankan activated carbon multinational Haycarb plc said March 2015 quarter net profit rose 18.2 percent to 279 million rupees from a year ago as it increased sales of value added products amid rising costs.
Earnings per share for the quarter were 9.41 rupees while sales rose 45.7 percent to 3.9 billion rupees, a stock exchange filing of interim results said.
Earnings per share of the coconut-shell based activated carbon maker in the financial year ended 31st March 2015 were 23.39 rupees.
Annual net profit fell 12 percent to 695 million rupees from the year before while sales rose 15 percent to 11.9 billion rupees.
Haycarb Managing Director Rajitha Kariyawasan said that the company operated in a “challenging external environment” during the year.
“The increase in price of the primary raw material, coconut shell based charcoal, impacted the profitability of the Sri Lanka and overseas operations, as the prevailing market conditions prevented the company from passing the increase in raw material and other input costs to end customers adequately.
“The markets continued to be affected by the depressed gold mining industry and low-cost competition from countries such as Philippines, Indonesia and India,” he said.
“The depreciation of currencies in key markets in which we operate, notably in the second half of the year, contributed to the erosion of margins.”
Kariyawasan added that several initiatives contributed to the recovery of profitability, especially in the last quarter of the year.
Haycarb, which has manufacturing plants in Sri Lanka, Thailand and Indonesia, said in a statement it expanded production during the year.
“Haycarb Group crossed the significant milestone of 40,000 MT of installed manufacturing capacity per year with the commissioning of the new plant in Indonesia and a major thrust on lean initiatives targeting productivity improvements.”
The lean projects launched by technical and manufacturing teams to achieve cost savings, notably through energy saving initiatives helped the company to retain its competitiveness.
“The increase in market share of value added carbons, and the growth in its non-traditional markets and purification systems helped to achieve the overall results.”
During the year, the company focused on expanding its supply chain network for coconut charcoal in Sri Lanka and Indonesia, reducing dependency on India.
Kariyawasan said that performances by the operations in Thailand and in Indonesia contributed significantly to overall group performance.
The group’s environmental engineering company, Puritas (Pvt) Ltd., showed a “significant growth” in its revenue and pre-tax profit.