Hayleys PLC profit for the year ended 31st March 2009 dropped by 26% to Rs.803 million from Rs.1.08 billion during the corresponding period the previous year. According to the Hayleys Annual Report, the consolidated gross turnover increased during the period under review to Rs.32 billion from Rs.30 billion in 2008.
The Annual Report shows that distribution and administrative expenses including other expenses and net finance costs increased for the year ended 31st March 2009.
In the Annual Report, Chairman and Chief Executive N.G. Wickremeratne stated that shareholders need to understand the reasons for the company's underperformance and what remedial meausres, where they are possible, are being contemplated.
Mr. Wickremeratne said the exit from the Consumer Durables business in 2007/08 continued to impact performance with a significant charge of Rs.107 million spilling over into this year. "There will be no carry-over of losses from Consumer Durables beyond the financial year ending in March 31, 2009, is of some comfort," he said.
Mr. Wickremeratne added taht there were several causes for the poor result. Hayleys, he said is like no other public quoted company because it is exposed to global trade as the company's Manufacturing and Plantation businesses account for over 60% of revenue. "We have continuously drawn attention to the fact that these businesses are hugely affected and their profitability eroded when there is no adjustment for inflation in the exchange rate and we suffer appreciation of th Rupee in real terms," he said.
"We witnessed a further deterioration on this which was relieved marginally in recent months. In our estimation we have lost 5-7 percentage points from our margin in our different businesses since 2005, even after achieving cost reductions and productivity improvements that have been essential survival measures."
Second, Mr. Wickremeratne said global trading conditions during the year went through unprecedented gyrations with a commodity spiral in the first three quarters giving way to a virtual collapse of the world economy in late 2008.
He said this was manifest especially in the closing months of the year with the negative sentiment affecting the company's businesses in Sri Lanka. "Our response to these challenges in most cases was quite impressive which is why we have some margin to show but admittedly there were instances where a better performance ought to have been delivered." |
E-mail