Sri Lanka’s Hayleys Fibre profits surge on parked cash, margins shrink
ECONOMYNEXT – Interest income on bank deposits boosted profits by 91 percent to 17.2 million rupees at Sri Lanka’s Hayleys Fibre, a manufacturer and exporter of coir products, in the December 2017 quarter despite shrinking margins, interim financial results filed with the stock exchange showed.
The company reported earnings of 2.15 rupees per share. In the nine months to end December 2017 earnings stood at 8.02 rupees per share on total profits of 64.1 million rupees, up 82 percent from a year ago.
The profit rise is largely due to a surge in interest income accounting for more than 60 percent of profits.
Revenue grew 16.5 percent in the quarter to 134.3 million rupees and cost of sales increased 20.5 percent to 123.9 million rupees, contracting gross profits by 17.5 percent to 10.4 million rupees.
The company’s administrative costs fell 10.4 percent to 11.2 million rupees.
Net finance income quadrupled to 12.1 million rupees in the quarter from a year earlier, leading to the growth in profitability.
The company has parked cash in short term bank deposits worth Rs515.7 million rupees as at end December 2017, up 240 percent from a year earlier.
The company’s revenue reserve increased to 580 million rupees (from 137 million rupees a year earlier) comprising 267.3 million retained profits for the previous financial year (2016/17).
The company also reported a 420 million rupee cash inflow from a property sale that year.
The company’s nine months to end December 2017 earnings growth is also due to interest income.
Profit from Hayleys Fibre’s core operations fell 23.7 percent to 7.5 million rupees during the period, but net finance income exploded to 39 million rupees from just 408,000 a year earlier.
(COLOMBO, February 08, 2018)