Haycarb revenue dips
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Group revenue at Haycarb dipped by 7.1 per cent year on year (YoY) in 2Q16, to reach Rs. 2.6 billion in 2Q15, from Rs, 2.8 billion reported during 2Q15. This decline in revenue can be mainly attributable to reduced prices in the products offered to the iternational market as negotiated due to the local price reduction of charcoal, according to analysts.
They said charcoal prices declined during last December and in January and then stabilised. As a result, the Sri Lankan charcoal prices on average have reduced 15-20 per cent compared to last year. The cost of sales of the group demonstrated a larger than revenue decline, of 14 per cent YoY to Rs. 1.9 billion. This decline was largely owing to reduction in the main input, charcoal prices in the local market, which resulted in substantial cost savings. Also, the group benefitted from the lean initiatives implemented during the post period, which generated savings from furnace and electricity.
Gross profit largely demonstrated an improvement of 14 per cent YoY to reach Rs. 730 million from Rs. 627 million due to the above factors, analysts said. Also, during the quarter the demand made by the foreign customers was largely for high margin value added products. As a result, this not only contributed to increase the gross profit level, but also increase the gross profit margin from 23 per cent reported last corresponding quarter to 27 per cent as well.