Corporate news

Hayleys profits impacted by tough business conditions in 1H 08-09

Sri Lanka's multinational blue chip Hayleys PLC has posted a turnover of Rs 16.6 billion in the six months ending September 30, 2008, achieving top line growth of 19 per cent, but recorded lower profits over the corresponding period of last year due to a tough second quarter for its businesses in Global Markets and Manufacturing.

In first half results released to the Colombo Stock Exchange the conglomerate reports that profit before tax at Rs. 741 million was down 16 per cent, while profit after tax and losses from discontinued operations declined 19 per cent to Rs. 377.5 million. Profit attributable to equity holders of the company dipped 11 per cent to Rs. 110 million.

Elaborating on the Group's performance, Hayleys Chairman and CEO N. G. Wickremeratne said, "This result was due largely to the Group's Global Markets and Manufacturing businesses being beleaguered by escalating costs and a static US$/SL Rs. exchange rate. Despite measures being taken to mitigate their effect, the erosion of margins continued."

He said purification products made a substantial contribution, helped by the performance of its overseas operations.

The contribution of Textiles remained significant but was much lower than last year.

The Hand Protection Sector was seriously impacted by the hostile environment and by continuing losses in DPL Thailand, and the Fibre business fared badly.

"The Agriculture and Agri Business Cluster performed well, with the performances of Agri-inputs and Plantations proving to be quite outstanding.

The Transportation Sector performed well as it has done over the last several years," Wickremeratne said.

Losses from discontinued operations amounted to Rs 50.8 million. The Group's exit from Consumer Durables will be complete by year-end.

Aitken Spence shows modest profit growth in Q2

The second quarter financial results of Aitken Spence PLC released to the Colombo Stock Exchange revealed Rs. 1.24 billion as profit-before-tax for the six months ended September 30, 2008.

The diversified conglomerate disclosed Rs. 792.4 million as profit attributable to the shareholders, a growth of 4.6 per cent, compared to the corresponding period last year.

Group Turnover increased by 18.6 per cent to Rs 14.8 billion, up from Rs. 12.5 billion for the corresponding period last year. Earnings per share increased 4.6 per cent from Rs. 27.98 to Rs. 29.28.

Deputy Chairman and Managing Director J. M. S. Brito said, "The contribution from the Maldivian sector had reduced in the second quarter due to refurbishments taking place in the Adaaran Resorts chain.

The impeding global recession and high energy costs has adversely affected the leisure sector further" .

Aitken Spence Hotels and Resorts added Hotel Atithi in Puducherry to its portfolio of hotels in India. At present Aitken Spence manages four other resorts in India and four resorts in Oman. It is envisaged that the company will have around ten hotels under its portfolio in South India alone within the next year.

During the period under review, as further testament to the company's green credentials, Heritance Ahungalla and Heritance Kandalama bagged the top two awards under the Services category at the National Cleaner Production Awards 2008, organised by the National Cleaner Production Centre (NCPC). Heritance Ahungalla was also awarded for Excellence in Water Efficiency and Excellence in Energy Efficiency. Heritance Kandalama and Ramada Resort, Kalutara also managed by Aitken Spence Hotels received Certificates of Merit for Energy Efficiency.

Brito said, "Regardless of industry downturns or upturns, we commit ourselves to continuously raise our standards in all aspects of our operations.

It remains true to our best practices in environmental and social governance as well.

We will continue to share our experience and expertise to local and international fora."

Aitken Spence secured the agency for Kingfisher Airlines, one of India's fastest growing private airlines.

Commencement of flight operations is expected during the third quarter.

Overseas operations help Haycarb maintain performance in 1H

Haycarb PLC, the Hayleys Group's globally-dominant activated carbon manufacturing business has reported a turnover growth of 13 per cent to Rs. 2.2 billion in the first half of 2008-09, but continuing shortages of raw material have slowed profit growth, the multinational reported.

Comprising specialised activated carbon manufacturing operations in Sri Lanka, Thailand and Indonesia, Haycarb was compelled to import charcoal for its manufacturing in Sri Lanka and to divert some orders to its overseas plants to counter rising local production costs, the company said this week.

As much as 40 per cent of its charcoal requirements in the six months ending September 30, 2008 were imported to feed local manufacturing operations and meet the demand for its products.

Coupled with higher prices for local inputs, specifically raw materials, furnace oil and electricity, this resulted in the Group's Cost of Sales growing 21 per cent to Rs 1.7 billion in the period reviewed, eroding margins and exerting pressure on bottom line indicators, the company said.

In results released to the Colombo Stock Exchange, Haycarb, the world's largest producer of coconut shell based activated carbon, reported that profit before tax at Rs. 146.3 million had declined 35 per cent from the Rs. 226 million achieved in the corresponding six months of the previous year. Profit after tax, including gains from discontinued operations, was down 31 per cent to Rs. 137.8 million.

Haycarb Managing Director Ananda Hettiarachchy said that since profit figures for the first half of the previous year had been boosted by a capital profit of Rs. 66 million, the profit for the six months under review discounting this extraordinary gain, reflects a nominal improvement.

This was made possible partly by the company's ability to reduce its finance costs by substantially reducing working capital, he said. In the six months reviewed, net finance costs declined by a significant Rs. 53 million, a 98 per cent improvement over the first half of 2007-08.

New Director Marketing at SML

Seylan Merchant Leasing PLC (SML) appointed Sumedha Fernando as Director Marketing (non-Board) of the company from October 15. Fernando who counts 23 years of working experience including 19 years in the financial sector, started his career as a propagandist at Mercantile Credit Ltd. and rose to the position of Assistant Branch Manager of the Gampaha branch.

He served Mercantile Leasing Ltd. as Head of Sales, Senior Manager-Sales (Leasing) and worked in Debt Factoring in the newly set up Business Finance Division of that company.

He worked for Trico International in Lebanon as Country Manager and for Al Rajhi Insurance (Al Rajhi Bank) in Saudi Arabia.

Fernando was involved in setting up Orient Financial Services Corporation Ltd., a fully owned subsidiary of United Motors, in 2003 which he served as Assistant General Manager - Marketing.

A past student of St. Peter's College, Colombo 4 he holds a Diploma in Marketing Management from the National Institute of Business Management, Sri Lanka and has participated in numerous local and international training programs related to financial marketing.