Sri Lanka’s Hayleys profits plunge 67-pct in Dec quarter

ECONOMYNEXT – Profits at Sri Lanka’s diversified Hayleys Plc fell 67 percent to 178 million rupees in the December 2017 quarter from a year earlier, on soaring borrowing costs, while increasing raw material prices and adverse weather hit manufacturing and agriculture margins interim accounts showed.

Earnings were 2.37 rupees a share in the quarter. In the nine months to December, earnings were 2.62 rupees a share on a total profit of 196.6 million rupees, down 87 percent from a year earlier, interim accounts filed with the stock exchange showed.

Hayleys closed at 235 rupees on Monday.

"It has been a challenging nine months for the Hayleys Group despite revenue growth in all our diverse business segments," Chairman Mohan Pandithage told shareholders.

Revenue in the quarter grew 66 percent to 49.9 billion rupees, cost of sales increased 65 percent to 38.2 billion rupees, expanding gross profits by 67 percent to 11.4 billion rupees.

Net finance costs doubled to 1.9 billion rupees in the quarter.

The group’s borrowings were 34.6 billion rupees end December 2016, nearly twice as much from a year earlier.

Pandithage promised measures to "realign the financial position" and boost profits.

He said the March quarter is usually the strongest for the group.

In the nine months to December, revenue from consumer products grew four-fold to 19.9 billion rupees, profits surged ten-fold to 965.7 million rupees mostly after the group bought electronics retailer Singer Sri Lanka in September 2017.





Revenues from rubber gloves grew 11 percent to 12 billion rupees, but profits fell due to rising raw material costs, the company said.

Logistics revenue grew 44 percent to 25.8 billion rupees and profits grew 69 percent to 1.9 billion rupees.

Activated carbon revenues grew 14.9 percent to 10.8 billion rupees with profits falling 22.6 percent to 700 million rupees.

Agriculture revenue fell 6.6 percent to 10.1 billion rupees and profits declined 38 percent to 735.7 rupees.

Revenue from plantations grew 35 percent to 9.3 billion rupees. The segment reported profit of 465 million rupees, compared to a loss of 281 rupees a year earlier.

Power generation revenues grew 51 percent to 1.2 billion rupees and profits grew 49 percent to 771.6 million rupees.

Revenue from hotels grew 1.3 percent to 4 billion rupees, but profits fell 71 percent to 150 million rupees. (COLOMBO, February 12, 2018)

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