Haycarb reports 20% profit growth for September quarter

The Hayleys group coconut shell activated carbon producing subsidiary, Haycarb PLC, posted a net profit of Rs.146.64 million for the September quarter (2Q17), up 19.92 percent year-on-year (YoY) with new product development but amid trying conditions.

The basic earnings per share increased to Rs.4.94 from Rs.4.12 YoY. The business environment for Haycarb remained relatively unchanged over the past year, as the gold mining and processing industry, which is one of the largest customers of Haycarb, remained tepid. Haycarb’s top line expanded 15.62 percent YoY to Rs.3 billion, while the cost of sales rose at a higher 22.39 percent YoY to Rs.2.31 billion. Haycarb Managing Director Rajitha Kariyawasan noted that though attempts to strengthen the raw material supply chains in Thailand and Sri Lanka were coming to fruition, the supply chains from Indonesia faced setbacks due to weather conditions and there was increased competition from charcoal exports. “While depressed conditions in the gold mining sector continues to impact the profitability, the raw material situation in Indonesia will be an additional challenge the company will have to contend with, in the short term,” he said.

However, he noted that new product development and marketing has brought in new clients and product segments, which contributed to the company’s growth. Haycarb’s net finance costs were trimmed down 64.71 percent YoY to Rs.32.66 million. Its total asset base improved to Rs.12.92 billion from Rs.12.63 billion at the start of the financial year, with the net assets per share increasing to Rs.208.05 from Rs.199.11 in the same period. For the first half of FY17, Haycarb’s net profit rose 15 percent YoY to Rs.296.97 million with a basic earnings per share of Rs.9.99 compared to Rs.8.67 YoY. The revenue increased 8 percent YoY to Rs.5.95 billion, while the cost of sales increased 9 percent YoY to Rs.4.50 billion.

The Hayleys group owns 67.73 percent of the shares in Haycarb, while the Sri Lankan government controls 8.24 percent of the shares through the Employees’ Provident Fund, Employees’ Trust Fund and Bank of Ceylon