Losses at Hayleys Fabric PLC swelled in the three months ended March 2020, as sales plunged while the operations were suspended two weeks prior to the end of the quarter as the world was engulfed in the worst pandemic in a century forcing all its foreign clients too to shutdown their operations.
However, the company soon adapted itself to the emerging opportunities in the healthcare sector, shifting from its fashion and sports related fabrics focus and reached its full capacity after re-commencing operations in the new quarter on April 17, the company’s Chairman Mohan Pandithage said.
The company reported a net loss of US$ 908, 280 in the January to March period, which swelled from a loss of US$ 94, 109 in the same period in 2019. The sales also fell sharply by 35 percent to US$ 11.9 million from US$ 18.5 million a year ago.
The loss translated in to a rupees loss of 169.4 million or negative 82 cents on sales of Rs.2.2 billion.
Profits were however slowing significantly from the December quarter on declining sales, soaring other expenses and net finance costs.
Even during the quarter ended in March, the other expenses nearly tripled to US$ 136,023 from US$ 55, 027 in the corresponding period last year, but the net finance cost fell sharply to US$ 90,156 from US$ 362, 477 a year ago.
Meanwhile for the year ended on March 3, the company managed to increase its earnings by 20 percent to US$ 1.3 million or Rs.231.4 million with a per share earnings of Rs.1.11. The annual sales were US$ 67.1 million, down 4 percent.
Hayleys Fabric was among the first to file its interim results with the Colombo Stock Exchange as the March earnings season kick started yesterday.
The knit fabric maker of the Hayleys group suspended its operations on March 16 adhering to the mandatory shutdown of business operations as required by the lockdown rules to contain the spread of the new coronavirus. This was the same time the company’s global clientele also went in to shelter-in-place conditions drying up the demand for its output, Pandithage said.
However the company commenced manufacturing on April 17 under strict heath and safety guidelines from the government and has now reached its full production capacity as it shifted its production to ‘Health Clothing’ from fashion and sport related fabric.
The company is in to offering end-to-end solutions from design, development, printing, brushing and sueding of pure and blended polyester and cotton fabrics from its factory located in Narthupana Estate, Neboda in the Western Province.
“The company’s product development and innovation division focused on ‘Health Clothing’ and have worked with large garment makers to shift from fashion and sports related fabric to health related fabric.
As a result we are currently operating with a full production capacity,” Pandithage said early this week in a separate disclosure.
Pandithage said while it had fallen in line with the cost rationalisation launched group wide, it will continue to explore new opportunities.
As part of its group rationalisation exercise, it has deferred new recruitments, capital expenditure, and advertising and promotion while putting on hold its corporate social responsibility programmes.
“The management is confident that the company’s production capabilities and reputation would enable the company to remain agile in this time of uncertainty and that the company would be able to adapt to the challenges of the future,” Panditha said.
Hayleys PLC owns 58.96 percent in Hayleys Fabric while Employees Provident Fund has 2.67 percent stake in the company being its third largest shareholder.