Mixed first half for Hayleys

• Turnover up 20% to Rs. 62.4 b; pre-tax profit down 44% to Rs. 1.38 b

Fuelledby topline growth across all of its key business segments, Hayleys PLC has posted a 20% year-on-year increase in turnover up to Rs. 62.4billion.

However its pre-tax profit was down by 44% to Rs. 1.38 billion and after tax profit declined by 56% to Rs. 718.7 million.

In a statement Hayleys said the Group has continuously infused higher levels of investment into key business segments with a view to enhancing growth potential over the medium-long term. These investments were also reflected in the Group’s net finance cost, which rose to Rs. 1.9 billion while group profit before tax for the period stood at Rs. 1.4 billion in 1HFY17/18.

In that context, Hayleys Group achieved significant benchmarks during the period in review, particularly in relation to its recent acquisition of a 61.73% of the issued share capital of Singer (Sri Lanka) PLC for a consideration of Rs. 10.9 billion, making it the single largest acquisition for a listed company in Sri Lanka in recent times. The Group raised its holding to 80.96% subsequent to the mandatory offer concluded on 31October.

Commenting on the Group’s performance over the first half, Hayleys PLC Chairman and Chief ExecutiveMohan Pandithage said: “The Group was able to achieve several significant milestones during the first half of the financial year, driven by aggressive investments that have positioned Hayleys Group for strong top and bottom line growth moving forward. Having finalised our acquisition of Singer Sri Lanka PLC, the Hayleys Group is now moving to expand rapidly into the retail sector leveraging on the time-tested expertise of both companies. 

“We are confident that the acquisition of Singer (Sri Lanka) PLC together with the recent major investments that the Hayleys Group has made into leisure and transport and logistics sectors are anticipated to yield significantly improved results for the Group in the future.” 

Turnover in the Group’s Transportationand Logistics segment rose from Rs. 11.1 billion up to Rs. 16.4 billion while operating profits rose from Rs. 631 million up to Rs. 1.1 billion during 1H17/18. 

Strong export market prices supported notable improvements in the Group’s Plantation sector which recorded turnover of Rs. 6.5 billion, as compared with a previous Rs. 4.4 billion, which in turn enabled an operating profit of Rs. 216 million, as compared with a loss of Rs. 358 million in the corresponding period of the previous year. 

Poor weather conditions hampered agricultural production, leading to a reduced turnover and operating profits, which ended the half at Rs. 5.5 billion, and Rs. 233 million respectively. Hayleys nevertheless maintains a positive outlook for its agriculture sector over the 2H17/18, particularly in the context of the commencement of the Maha season. 

Increased raw material prices also negatively affected the group’s Hand Protection and Purification Products segments. Revenue in the Hand Protection segment stood at Rs. 8 billion while operating profits stood at Rs. 98 million. Revenue in the group’s Purification Products rose to Rs. 7.1 billion while operating profits closed the half at Rs. 358 million.

Leisure sector operating profits reduced to Rs. 36 million despite relatively stable turnover of Rs. 2.6 billion, largely as a result of investments made towards the refurbishment of key hospitality properties within the group.