Hayleys posts Rs 185 m pre-tax profit in 1Q, 2007/08

Hayleys PLC, the diversified Sri Lankan multinational has reported a turnover of Rs 6,650 million and a pre-tax profit of Rs 185 million for the first quarter of 2007-08, in a measured start to the current financial year.

The blue chip conglomerate has had to contend with a mixed performance in key sectors in the quarter under review. While the contribution from the Global Markets and Manufacturing Group was especially strong, some of the sectors exposed to the domestic economy showed poorer results.

As a consequence, the Group's profit after tax for the three months ending June 30, 2007 at Rs 68 million reflected a decline of 81 per cent over the corresponding quarter of the previous year, resulting in a loss of Rs 60 million attributable to shareholders of the company.

Consumer Products suffered a setback caused by losses in the Durables business. Commenting on these results, Hayleys Chairman N. G. Wickremeratne said: "There have been strong performances in almost all our export businesses. The biggest concern is the continuing costs of restructuring our Consumer Durables business, which we expect will ultimately mitigate our risk in the Consumer Products sector."

Wickremeratne said the Group's activated carbon manufacturer Haycarb had turned in a greatly improved performance, with the Purification Products sector's operating profit growing from Rs 42 million in the first quarter of last year to Rs 119 million in the first quarter of 2007/8.

Hayleys MGT Knitting Mills, the Group's associate in Textiles had an outstanding quarter as well. The Hand Protection sector generated strong results for the Group, contributing Rs 110 million of its operating profit, though this result was lower than that of the exceptional first quarter of last year.

The Agri Inputs sector was affected by the failure of the Yala season, he said. Plantations registered a creditable performance despite the consequences of the plantations strike at end 2006.

Transportation made an appreciable contribution also, even though it performed less well than in the previous year.