5 August 2016 12:10 am
The net profit of Hayleys group coconut shell-based activated carbon producer Haycarb PLC saw its net profit for the June quarter (1Q17) growing 11 percent year-on-year (yoy) to Rs.150 million, the interim financial accounts released to the Colombo bourse showed.
The basic earnings per share improved to Rs.5.06 from Rs.4.55. The revenue for the period however grew only 1 percent yoy to Rs.2.94 billion amid the downturn in the gold mining industry and intense competition. Activated carbon is widely used in gold processing.
The cost of sales for the period fell 3 percent yoy to Rs.2.19 billion. But administrative costs rose 12 percent yoy to 450.2 million. Haycarb PLC Managing Director Rajitha Kariyawasan said while the company’s initiatives to strengthen raw material supply chain networks in Sri Lanka and Thailand showed progress, the raw material situation in Indonesia had setbacks resulting in increasing prices due to low supply availability caused by bad weather cycles and increased exports.
“The adverse market conditions due to the downturn in gold mining which continues to impact international markets was exacerbated by the low cost competition from countries such as Philippines and India resulting in under-utilization of Haycarb’s installed capacity during the first quarter of 2016/17,” he said.
He noted however that success in business development and new product development initiatives that increased marketing reach to new geographies and product applications together with the upturn in the value added product portfolio helped the bottom line in spite of less than expected growth in sales revenue. He added that growth in the environmental engineering arm Puritas (Pvt.) Ltd. is expected to contribute positively to the profitability of the Group.
Haycarb is the pioneer manufacturer of coconut shell activated carbon in any coconut producing country with manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the USA, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes whilst remaining a leading and technologically superior manufacturer in its chosen segment.