Corporate

Hayleys MGT posts healthy first half profit growth

Hayleys MGT Knitting Mills, the Hayleys Group's cotton and synthetic fabric manufacturing business has posted a net profit of US$ 1.77 million for the six months ending 30th September 2009, recording a growth of 25 per cent over the first half of the previous year.

In results released to the Colombo Stock Exchange this week, the company reported that profit before tax and Economic Service Charge (ESC) had grown 20 per cent to US$ 1.8 million in the first half of 2009-10, despite turnover declining by a similar per centage to US$ 25.4 million.

This noteworthy achievement was made possible by a 25 per cent drop in the company's cost of sales, largely as a result of lower energy costs; increased production of synthetic fabrics, a better product mix and lean production practices, Hayleys MGT Jt. Managing Director Bandula Weerasinghe said.

'We had a particularly good second quarter,' Weerasinghe said, disclosing that net profit for the three months ending 30th September 2009, reflected a growth of 64 per cent over the corresponding quarter of 2008-09. The outlook for the rest of the year is equally strong, particularly since the commissioning of the company's new bio mass steam generator and state-of-the-art rotary and digital printing facility would further offset energy costs and add value to the company's product range, Mr. Weerasinghe added.

Hayleys MGT now offers comprehensive fabric printing solutions for both 100 per cent cotton and synthetic fabrics.

A major supplier to top international brands such as Marks and Spencer, Next, Nike, Tesco and Decathlon, Hayleys MGT is the first fabric manufacturer in Sri Lanka to be certified as compliant with the world's most stringent Social Accountability Standard, SA8000. The standard represents a comprehensive and flexible system for the management of ethical workplace conditions throughout global supply chains and assures a humane workplace through respect for workers rights.

Seylan storms back to success

Seylan Bank has posted an after tax group profit of Rs. 585 Mn. in the interim results for the first three quarters of 2009.

Operating under its Central Bank of Sri Lanka-appointed new management, and, with the implementation of the new Strategic Plan, Seylan Bank has launched an aggressive recovery drive to reduce non-performing loans while concentrating on profitable areas and prudently managing expenditure.

Chairman Seylan Bank Eastman Narangoda said that the run on deposits experienced by the Bank in December 2008 and the 1st Quarter of 2009 is now history. `Since the new Board took over, we have been very transparent in all our dealings and have successfully restored investor confidence. Furthermore, the faith and confidence the public, the Sri Lankan diaspora and expatriate workers living and working overseas have in the newly structured Seylan Bank has increased tremendously.

This has resulted in the Bank's deposit base growing substantially. The increase during the past 10 months is Rs. 4 Bn. and it now stands at a record Rs. 104.694 Bn, he added. With a Return on Assets (ROA) of 0.71% and Return on Equity (ROE) of 9.29%, the ROA and ROE ratios show an appreciable increase against 2008. The statutory liquid asset ratio also remains healthy and was above 22% as at 30 September 2009. Last month, Seylan Bank launched a Public Share Issue of 54,290,000 new ordinary voting shares at Rs. 35.00 per share. Concurrent to the public offer the Bank also placed an additional 32,150,000 Ordinary Voting Shares at Rs. 35.00 per share with Bank of Ceylon (BOC) and Sri Lanka Insurance Corporation (SLIC).

The Public Share Issue was tremendously successful and had to be closed 6 days early since it was over subscribed. The issue brought in additional capital base of around Rs. 3 Bn which is expected to give the Bank a strong balance sheet and enable future expansion. As part of its expansion policy, the Bank will soon open two Branches in Mannar, Nelliady and two Extension Offices in Chankanai, and Manipay. The Directors of Seylan Bank are Eastman Narangoda (Chairman), R. Nadarajah (Executive Director), Nihal Jayamanne PC, Lalith Vithana, Naomal Goonewardena and Retd. Rear Admiral B. A. J. G. Peiris, all eminent professionals. This Board will soon be further strengthened with new directors from the institutional investors.

Piramal Glass reports turnaround in Second Quarter

Piramal Glass Ceylon Plc reported a turnaround in the second quarter of the Financial Year 2010. Revenues grew by 28% to Rs 952 million, while the Operating Profits were up by 32% to Rs 302 million. The Company also reported a Net profit of Rs 1.0 million after 6 consecutive quarters of Net Losses.

Piramal Glass Ceylon Plc (PGC), a manufacturer of flaconnage (glass containers) for food and beverages, cosmetics, perfumery, as well as pharmaceuticals, have reported a turnaround in their second quarter results for the financial year 2010, said the CEO and Executive Director of PGC, Sanjay Tiwari.

According to Tiwari, net sales for the quarter ending 30th September, 2009 grew by 28% to Rs 952 million. 'Our Operating profits grew by 32% to Rs 302 million, while the Net profit for the period was Rs 1 million as compared to a loss of Rs 33 million for the same period last year'.

The second Quarter had ended on a satisfactory note for the Organisation. "This quarter's performance is truly the outcome of improved manufacturing operations, an increase in our export market share and focused efforts towards cost optimization", said Sanjay Tiwari. The total increase in sales during the Quarter was mainly due to the three fold increase in the export segment. The company reported an export of Rs 330 million, which in turn reflected a growth of 312% during the second quarter of the financial year 2010. The company's exports consisted of coloured liquor and wine bottles, as well as flint liquor and food bottles. During the period under review the Company also launched six new colour bottles for exports to various countries.

As the Chairman of the Company Vijay Shah quoted at the Company's AGM last July 2009, 'this was a Greenfield Project and had to face several hurdles during its implementation and the first year of its operations. The full capacity was available only after November 2008.' As the sole manufacturer of glass bottles in the country the company has to feed the entire local market, with the surplus being exported. 'As a result of global recession the export market has become increasingly competitive with China and India posing serious threats. The company's ability to withstand such competition was derived solely from its niche colouring facility and the availability of the Plant's full capacity, which has not only enabled increased production, but has helped the Company to become more competitive in the international market', said Tiwari.

Half Yearly Results : The Total Revenue for the half year ending 30th September, grew by 23% to Rs. 1,751 million. The Operating Profit was up by 42% for the first six months of the financial year 2010 to Rs 502 million as compared Rs. 354 million in the same period of the previous year, while the Net loss for the first half of the financial year 2010 was lower at Rs. 118 million when compared to the loss of Rs. 153 million in same period of the financial year 2009.

'Once again PGC has demonstrated its capability of going global by achieving an encouraging growth of 247% in export sales as against the corresponding period in the previous year. The exports during the first half increased to 37% of total revenue as against the figure of 13% in same period in the financial year 2009'.

During the period under review, PGC exported a total volume of over 14,000 tonnes, consisting of over 51 million bottles to various countries.

Tiwari said that the domestic market had continued to show a drop of 11% as against that of the first half of the previous year. 'The Company has yet to realize the benefits of the opening up of the North and East subsequent to the cessation of the war' he said.

The daily production of glass tonnage drawn from the furnace has increased from 188 tonnes to 224 tonnes, with efficiency too increasing by over 10%. 'This turnaround of the plant has resulted in almost 8000 tonnes of additional glass being produced during the first six months of the year, an increase of over 30% when compared to that of the similar period last year'.