Haycarb posts 1Q net profit of Rs. 217 m

Haycarb PLC has made a solid start to 2012-13 with the expansion of the company’s value added carbon portfolio generating revenue and profit growth in the first quarter of the year.

In results released to the Colombo Stock Exchange, the Hayleys Group’s activated carbon manufacturer reported that revenue grew  to Rs. 2.7 billion in the three months ending 30 June 2012, while profit before tax improved  to Rs. 259.8 million.

Net profit recorded for the quarter was Rs. 217 million, out of which profit attributable to equity holders of the company was Rs. 179 million.

Haycarb PLC Managing Director Rajitha Kariy-awasan said the company had increased its value added carbon segment and run factories at full capacity in the period under review. The decrease in charcoal prices in Sri Lanka and Indonesia had also helped temporarily to improve margins.

However, the benefit of the reduced charcoal prices had been passed on to customers, and the raw material prices could move up when major producers such as India, Indonesia, Philippines and Sri Lanka move into the lean production season, Kariyawasan cautioned.

“Haycarb will continue its strategy of investing in charcoal inventory with a significant funding in working capital to ensure supply security and building stable relationships with the supply chain,” he added.

“The continuing economic slowdown and stagnation in our European, Japanese and US markets will also result in a drop in demand for certain types of carbon,” he said. “Therefore we have to be cautious about the months ahead.”

A significant increase in cost due to last year’s sharp oil price revision and substantial increase in labour cost and overheads will also impact margins, he said. If the Sri Lanka Rupee and other Asian currencies stabilise at or below current levels, the company would be able to mitigate these impacts.

“Our plans for capacity expansions and further value additions coupled with geographic market expansions are expected to achieve the growth targets set by the company,” Kariyawasan said.  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 A.M. Pandithage – Chairman, H.S.R. Kariyawasan – Managing Director, 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.