Strong second quarter heralds upturn at Hayleys

Strong performances from companies in ‘Global Markets and Manufacturing’ in the second quarter of 2007-08 have generated a welcome improvement in top and bottom line performance for Hayleys PLC, the diversified multinational blue chip conglomerate.

The Group this week reported that profit before tax had grown 16 per cent to Rs 534.9 million in the three months ending September 30, taking the figure for the first half of the year to Rs 719.5 million.

Profit after tax for the quarter at Rs 398.5 million reflected a growth of 20 per cent over the corresponding quarter of 2006-07, resulting in a consolidated first half post tax profit of Rs 466.6 million. Turnover for the first six months of the year was up 7 per cent to Rs 14.2 billion, helped by a 10 per cent growth in the second quarter.

Commenting on these results, Hayleys Chairman N. G. Wickremeratne said: “The Group’s performance showed welcome improvement in the second quarter of the year. Although performance for the half year still lagged behind that of the previous year due to the results of the first quarter, profit before and after tax and attributable to equity holders of the company were all higher in the second quarter compared with the corresponding quarter of last year.”

“We are encouraged by the overall result achieved in the second quarter of the year and strive for a performance for the year which will be significantly better than the previous year’s,” Wickremeratne added. “We expect this will be driven by continuing strong performances in Global Markets & Manufacturing, a recovery in Agriculture & Agri Business and a good performance from the Transportation sector.”

In the quarter reviewed, performance was boosted by creditable results from Purification Products (Haycarb) and Textiles (Hayleys MGT Knitting Mills) with Hand Protection (Dipped Products) also performing strongly.

Among the noteworthy contributors to the Group’s results in the first half of the year, Purification Products generated a turnover of Rs 2.0 billion and an operating profit of Rs 290 million, Hand Protection a turnover of Rs 4.4 billion and operating profit of Rs 254 million, Transportation – Rs 1.7 billion and Rs 241 million and Plantations (KVPL) – Rs 1.0 billion and Rs 142 million respectively. Hayleys MGT Knitting Mills, the Group’s associate in Textiles contributed Rs 118 million to Group profit in the period under review.

Profits made from the sales of investments also contributed to Group results.In Agriculture & Agri Business, the Agri Inputs sector was affected by unfavourable weather. Resorts also fared poorly on account of a drop in tourist arrivals in Sri Lanka.