Hayleys Group reports 22% growth

Hayleys PLC, one of Sri Lanka's leading conglomerates, in a filing to the Colombo Stock Exchange reported resilient growth for the first half of the financial year 2013/14.

Despite trying operational scenarios constraining performance of some key business sectors, the Group maintained an upward growth trend in revenue and profitability for 1H, 2013/14.

The Hayleys Group posted a 22% growth in profitability, pushing Group PBT to Rs. 2.5 billion. Group Revenue expanded by 11% in the first half of the financial year.

Of the Group's two largest manufacturing sectors, the Purification sector posted operating profits of Rs. 663.3 million despite contracted revenue stemming from a global downturn in the gold carbon industry.

However, enhanced operational efficiencies and targeted high margin segments helped support the bottom line of the sector. The Hand Protection sector experienced trying operational circumstances during the latter part of the period under review, since the management was compelled to suspend operations at the factory at Rathupaswala. However, the sector continued to remain profitable, recording an operating profit of Rs. 494.6 million for the first half of the financial year.

The Construction Materials sector which witnessed a profit expansion of 38%, supported by stable world market prices for raw materials, saw strong growth in demand from the local construction sector.

Operating profits in the Agriculture sector rose by 52% due to conducive weather conditions as opposed to the corresponding period in the previous financial year. However, the Plantations sector was negatively affected by adverse weather conditions in key plantation areas during the second quarter.

Wage hikes earlier in the year further added to cost escalations. Nevertheless, improved tea prices supported the sector, positioning it as a significant contributor to Group earnings.

Renewable energy led strong profit growth in the Power and Energy sector. Industrial Inputs, on the other hand, experienced slackened demand in certain key industrial sectors such as Dairy, Rubber and Paint.

Consumer Products posted a 39% growth in profitability, as the sector's product portfolio was expanded.

The Transportation and Logistics sector continued to record strong earnings as operating profit grew13%. The future outlook for the sector is positive with policy reforms and infrastructure development in the port sector supporting business growth.

The Group's Leisure and Aviation sector made a sound contribution spurred by positive operating profits recorded by The Kingsbury despite a more subdued earnings contribution by the resorts sub-sector represented by the Amaya Group. However, ongoing product development and expansions at key Amaya hotels is expected to support growth in the latter half of the financial year.