Diversified conglomerate, Hayleys PLC increased its March quarter (4Q16) net profit by 49 percent from a year ago to Rs.1.32 billion with an earnings per share of Rs.17.57 as the transport and logistics, leisure and agriculture segments performed well, the interim results showed. The Hayleys share closed at Rs.4.70 or 1.62 percent down at Rs.285.30 at yesterday’s close.
The hand protection and plantation segments continued to weigh on the group as both units saw their top and bottom-lines falling sharply due to toughened global market conditions and perennial issues back home. The group top-line edged up 2 percent year-on-year (yoy) to Rs.24.6 billion while the cost of sales increased by just 1 percent yoy to Rs.18.3 billion resulting in a Rs.6.4 billion gross profit, up 6 percent yoy.
Distribution expenses rose by a sharp 46 percent yoy to Rs.905.9 million during the quarter. The operating profit for the quarter was Rs.2.8 billion, up 11 percent yoy. Meanwhile, for the financial year ended March 31, 2016, Hayleys group posted a net profit of Rs.3 billion with earnings per share of Rs.40.05, an increase of 16 percent.
The top line did not grow and remained at Rs.92.3 billion but a 2 percent decline in cost of sales enabled the group to post Rs.22.6 billion gross profit, up 6 percent. The operating profit remained still at Rs.8.5 billion for the full year as the growth in overheads took toll.
The segmental results showed the hand protection segment’s operating profits sinking to Rs. 542 million from Rs.1.55 billion a year ago. The revenues also fell by Rs.2.2 billion to Rs.12.73 billion. The plantation segment narrowed its operating profits to Rs.217.9 million from Rs.566.1 million a year ago. The plantation revenues fell by Rs. 3.6 billion to Rs.9.09 billion. The hand protection and plantation sectors continued to be affected by global rubber and tea prices and adverse weather conditions.
The hand protection sector is increasingly shifting towards more value added exports to improve profit margins and manage increasing input costs. Meanwhile, the transport and logistics segment increased its operating profit by 17 percent yoy to Rs. 1.58 billion. The segmental revenue was Rs.15.8 billion, up 11 percent. Transport and logistics was the largest segment in the group by revenues and operating profits. During the year, this segment set up an entreport trade facility, called Hayleys - Free Zone, which included facilities such as cold storage, value addition and re-packaging for re-export.
The group’s leisure arm posted an operating profit of Rs.990.7 million, up 26 percent on revenue of Rs.4.5 billion which increased from Rs.3.9 billion a year ago. The group’s agriculture business, excluding plantations, posted an operating profit of Rs. 1.29 billion, an increase of 24 percent. The segmental revenue was Rs.11 billion against Rs.8.4 billion last year.
The power and energy segment however missed last year’s performance by a margin as it made an operating profit of Rs.616.6 million compared to last year’s Rs.671. 3 million. The segment earned revenue of Rs.935.3 million against Rs.988 million. The group’s purification business made a profit of Rs.1.2 billion, down from Rs.1.3 billion last year on revenue of Rs. 11.7 billion, again missing from Rs.11.9 billion last year. As of March 31, 2016, Dhammika Perera together with his parties acting in concert held 50.44 percent stake, slightly up from 50.27 percent held during December 2015. Employees’ Provident Fund held 4.68 percent stake being the third largest shareholder, slightly up from 4.18 percent three months ago.