Haycarb posts Rs 574 m profit
Haycarb PLC, the Hayleys Group's multi-national activated carbon
manufacturing business, has reported turnover of Rs 6.4 billion and
profit before tax of Rs 724 million for the year ending March 31, 2011,
a period of challenge as a result of worsening raw material shortages.
chairman A. M. Pandithage
The continuing strong demand for activated carbon and a greater focus
by the company on value addition had enabled it to increase sales
volumes resulting in a 26 per cent increase in revenue.
However shortages of coconut shell charcoal and the consequent higher
prices, saw cost of sales increase by 34 per cent over the 12 months.
As a result, Haycarb's gross margins contracted significantly,
exerting pressure on profit. Haycarb reported after tax profits of Rs
574 million and attributable profit of Rs 505 million, for the 12 months
ending March 31, 2011.
"The biggest challenge for Haycarb is the scarcity and very high
prices of coconut shell charcoal, which has become a world-wide issue,
now extending to Sri Lanka, India, Thailand, Indonesia, Philippines and
Vietnam," Haycarb's Managing Director Rajitha Kariyawasan said.
The most affected location has been Haycarb's largest manufacturing
base in Sri Lanka where the annual point-to-point increase in the price
of coconut shell charcoal was in the region of 50 per cent.
The significant drop in coconut crops, increasing domestic
consumption and the widening gap between charcoal supplies and installed
activated carbon capacity in Sri Lanka has compelled Haycarb to increase
its imports of charcoal year on year.