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Haycarb’s 1H sales Rs. 3.8 billion, PBT Rs. 334 million

Oct 31, 2011 3:58:20 PM - www.ft.lk

Haycarb PLC has reported revenue growth of 21 per cent to Rs 3.8 billion for the six months ending 30 September 2011, with stable demand in global markets and the company’s reliable supply stream of high quality carbons with  a product mix of value-added carbons protecting its top line in a period of narrowing margins.

In results filed with the Colombo Stock Exchange, the Hayleys Group’s top notch activated carbon manufacturing business reported profit before tax of Rs. 334 million and net profit of Rs. 279 million for the six months.
Haycarb Managing Director Rajitha Kariyawasan said these profit figures, though lower by 21 and 19 per cent respectively over the corresponding period of the previous year where the price pressure on charcoal was less significant, reflected a stable level of profit in the context of the unprecedented increases in the prices of coconut shell charcoal, its principal raw material.
He disclosed that raw material prices had increased by more than 40 per cent point-to-point since 31 March 2011 in Sri Lanka, Haycarb’s largest manufacturing base, and similar trends experienced in its other manufacturing locations at different levels, had squeezed gross margins of the company’s manufacturing operations.
Nevertheless, the Company’s far sighted decision and its ability to procure charcoal supplies at high prices without any disruption of carbon supplies to its valued customers further enhanced its reputation as a reliable and a quality supplier during a period of serious supply constraints in coconut charcoal and the carbon market, Kariyawasan said.
He said the company had decided to invest heavily to build its charcoal inventory to overcome the on-going issue of raw material shortage.  
The Company had also continued its capital expenditure programme, investing in additional value-added carbon projects for new applications, expanding and upgrading its manufacturing locations, and introducing the SAP Enterprise Resource Planning (ERP) system for its Sri Lankan operations.   The investment in SAP realises a long-felt need to have a better and integrated information system to create the necessary systems platform for future growth.
A new joint venture involving Puritas (Pvt) Ltd, a fully owned subsidiary of Haycarb PLC, and Veolia Water, India, had been awarded the contract for a large waste water treatment facility for the National Holiday Resort, Passikudah, on Design-Build and Operate basis, Kariyawasan disclosed. 
He said this outcome, the first project on this model in Sri Lanka in the waste water management sphere, is part of a strategy to develop the capability of Puritas to service medium and large scale infrastructure projects in the country, in collaboration with a reputed international leading player in this sphere.
The pioneer manufacturer of activated carbon in any coconut producing country, Haycarb is also the world’s largest producer of coconut shell-based activated carbon.
The Group, whose manufacturing facilities in Sri Lanka, Thailand and Indonesia are supported by marketing offices in the UK, Australia and USA, produces standard, washed and impregnated carbons in granular, pellet and powder form.
The Board of Directors of Haycarb PLC comprises Chairman A. M. Pandithage, Managing Director H. S. R. Kariyawasan, R. P. Peris, R. Seevaratnam, A. M Senaratna, K. D. D. Perera, S. C. Ganegoda, M. J. A. S. Abeyratne, D. E. Ranaraja, W. D. N. H. Perera and Dr. S. A. K. Abayawardana.