Hayleys Group concerned about ‘predatory foreign
The Hayleys Group said last week that it was concerned
about the impact of the recent go-slow in the Port of Colombo, other
threats of disruption in vital utilities and predatory foreign competition.
Hayleys Chairman Rajan Yatawara, in a report on
the group’s first quarter 2006-07 results, said the performance
during the quarter was very encouraging and he expected the favourable
trend to continue over the remainder of the year.
But he pointed out: “We remain concerned,
however, about issues such as the impact of the recent go-slow in
the Port of Colombo, other threats of disruption in vital utilities
and the advent of probably predatory foreign competition."
The crisis at the port adversely affected imports
and exports while the petroleum distribution crisis – which
is not yet over with trade unions flexing their muscles for another
agitation over the appointment of a new chairman – has raised
costs for many companies. The issue of ‘predatory foreign
competition’ is an issue that Hayleys has raised in the past
after the BOI allowed the entry of foreign investors in the activated
carbon industry, a pioneering project by the Hayleys Group.
The company has posted a healthy 82 per cent increase
in profit attributable to equity holders in the three months ending
June 30, 2006.
Led by noteworthy contributions from transportation,
hand protection and plantations, the blue-chip conglomerate has
achieved a 78 per cent growth in profit after tax from Rs 201 million
in the first quarter of 2005-06 to Rs 358 million in the first quarter
this year, on a turnover of Rs 6.3 billion, which was up 24 per
According to a company statement, Hayleys pre
tax profit for the quarter reviewed had grown by 45 per cent to
Rs 464 million, while profit attributable to equity holders of the
parent company was up 82 per cent to Rs 186 million. This is the
highest attributable profit recorded by Hayleys in a first quarter.
Yatawara said the transportation sector continued
to perform creditably, and Hand Protection improved significantly
on the previous year. Plantations performed strongly, and Agri Inputs
and Consumer Products sustained their worthwhile performances. Industry
Inputs contributed strongly as well. Purification Products showed
welcome improvement, as did Fibre. Among the Associates, Hayleys
MGT continued to do well, and Colombo Dockyard, which shareholding
was sold in July, made a useful contribution, while Talawakelle
Tea Estates also performed well.
The Group's Purification and Fibre sector businesses,
which were adversely affected throughout the previous year by raw
material shortages and the post-tsunami strength of the Rupee, were
helped by an improvement in the supply situation and a marginal
improvement in the exchange rate.
Of the main contributors to Group profits before
finance charges, the Transportation sector generated Rs 141 million
(a decline of 15 per cent over the first quarter of last year);
Hand Protection Rs 131 million (up 33 per cent); Plantations Rs
99 million (up 51 per cent) and Industry Inputs Rs 28 million (a
growth of 148 per cent). Noteworthy contributions were also made
by Consumer Products (Rs 56 million), Agri Inputs (Rs 60 million)
and Purification Products (Rs 42 million).
The share of profit from associates rose by 6
per cent to Rs 82 million.