Haycarb profits up at Rs 227 million in ’07-08

Sri Lanka’s Haycarb Group, the world’s largest producer of coconut shell based activated carbon, has reported ‘substantial progress’ in 2007-08, following strong performances from its manufacturing locations in Sri Lanka and overseas, better sales and stable charcoal prices.

The Hayleys Group Company that accounts for more than 17 percent of global production in its category has reported a pre-tax profit of Rs 308 million for the year ending March 31, 2008, an increase of 82 percent over the previous year. Profit from continuing operations after tax was up 78 percent to Rs 274 million, while turnover in the year reviewed grew by more than Rs 1 billion or 34 per cent to Rs 4.2 billion, the company said.

The Group incurred a one-off loss of Rs 46.6 million on account of discontinued operations, consequent to which it delivered an attributable profit of Rs 227 million, an increase of 151 per cent over the Rs 90 million of 2006-07.

“These results signify substantial progress after two very difficult years,” Haycarb PLC Managing Director Ananda Hettiarachchy was quoted as saying but cautioned that “nevertheless, a profit of Rs 229 million does not as yet reflect the full potential of Haycarb in relation to the size of the company.”
He said a 23 per cent growth in sales in value terms had been achieved through volume increases as well as an increase in the percentage of new value added carbons in the Group’s product mix.

New technology and processes and innovations introduced in the year had enabled Haycarb to convert old stocks into a saleable product and significantly reduce working capital, Hettiarachchy disclosed.

However, the Group’s manufacturing operations in Sri Lanka, Indonesia and Thailand also had to contend with several adverse factors, including the appreciation of local currencies against the US Dollar in all of these locations. Additionally, the rising prices of furnace oil as well as the effect of high inflation and increasing electricity costs in Sri Lanka had a negative impact on potential growth in the year under review, and would remain challenges in the year ahead, he said.

Among the positives of the year concluded was that the strategies implemented by the Group in the course of two difficult years, during which raw material shortages and other factors affected growth, were clearly contributing to progress, Hettiarachchy said.

Haycarb’s companies in Indonesia and Thailand had achieved volume increases, been able to secure better prices and increased the number of value added products in their portfolios, he explained.