Monday, February 8, 2010


Feb 08, 2010 (LBO) – Sri Lanka’s Hayleys said December quarter group net profit shot up 276 percent to 279 million rupees from a year ago, helped by strong performances in rubber gloves, purification products and coir fibre businesses.
Sales in the quarter rose 27 percent to 10.3 billion rupees over the period, the conglomerate said in a stock exchange filing.

Basic earnings per share for the quarter were 3.72 rupees compared with 0.99 rupees the year before.

In the nine months to December 2009, group net profit shot up 351 percent to 832 million rupees from a year ago with sales up 10 percent to 27.2 billion rupees.

Earnings per share in the nine-month period were 11.1 rupees compared with 2.46 rupees in the previous year.

Hayleys chairman and chief executive Mohan Pandithage said there was a “marked increase” in cash generated from operating activities.

“We remain committed to seeking new business opportunities in agriculture, transportation, power and leisure, while other businesses will continue to explore avenues of expansion locally and overseas,” he said

“The Global Markets and Manufacturing Sector continued to return robust results, though we are yet to see a significant improvement in global demand,” he said in a statement accompanying the accounts.

“Hand protection sector performed strongly, the ongoing focus on lean manufacturing initiatives and the ability to preserve margins yielding dividends.”

Hayleys’ Dipped Products rubber gloves subsidiary is one of the top five industrial rubber gloves producers in the world.

“Greater focus on value added products helped the purification sector to nearly double its operating profits during the period,” Pandithage said.

Hayleys activated carbon subsidiary, Haycarb, is a top producer of coconut shell-based activated carbon.

Pandithage said the group’s coir fibre business showed improved performance during the nine months under review.

But its textiles unit profit was slightly lower than that posted last year, although its contribution to group profits rose after the parent firm increased its stake in the company, which is now accounted for as a subsidiary.

The group’s agri products business showed “vastly improved” results, recovering from a loss in the corresponding period of the preceding year, Pandithage said.

Hayleys plantation business, while handicapped by a mandatory wage increase of over 40 percent last year, managed a “remarkable turnaround” on improved crop yields and higher auction prices during the latter part of the year, he said.

“The transportation sector though profitable, performed below expectations due to the lingering effects of the global recession on some of our new business initiatives particularly in the fields of international freight and logistics.”

Pandithage said greater efficiencies in working capital management and declining interest rates brought about a substantial reduction in finance costs.

Net finance costs in the December quarter fell 44 percent to 179 million rupees from a year ago, the accounts showed.

Pandithage also said “portfolio realignment initiatives” also contributed to the profit achieved.

“This process of re-configuration will be pursued vigorously so as to ensure the optimal mix in the group’s investment portfolio,” he said.

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