Haycarb posts net profit of Rs.343m in 1H
Haycarb PLC, the Hayleys Group's value-added activated carbon
manufacturer, has achieved a consolidated profit before tax of Rs 421
million for the six months ending September 30.
Net profit increased to Rs 343 million over the corresponding six
months of last year and Group turnover improved by 22 percent to Rs 3.1
billion, according to figures released to the Colombo Stock Exchange.
Profit attributable to equity holders of the company stood at Rs 305
million for the same period.
Local manufacturing operations posted a net profit growth of 10
percent for the half year, but profit for the second quarter reflected a
decline of 11.6 percent over the corresponding quarter, principally as a
result of higher charcoal prices, the company said.
"Charcoal purchase prices in Sri Lanka have increased by more than 16
percent in comparison with the first six months of last year," Haycarb
Managing Director Rajitha Kariyawasan said.
Additionally, the significant appreciation of local currencies in
Indonesia, Thailand and Sri Lanka against the US Dollar also contributed
to a reduction in the gross margin of the group, he said.
These two factors are expected to remain a challenge through the
second half of the year, during which the impact of an increase in
furnace oil prices would also be felt, Kariyawasan said. The difficult
economic environment in the US and Europe, along with intense
competition makes it extremely difficult to pass on cost increases to
customers, he said.
A strategy of overhead recovery through higher capacity utilisation
supported by growing demand for activated carbon, a focus on higher
value products combined with technical efforts had enabled Haycarb to
mitigate to some extent the effect of increasing raw material and other
production costs and the appreciation of local currencies, he said.
Supporting initiatives to focus on higher value added products, the
company has embarked on a new marketing campaign in international
markets aimed at a strategic re-positioning to better articulate its
values, vision and personality as a world leader in eco-friendly
purification solutions.
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