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Wednesday, 31 July 2013 00:22 - - {{hitsCtrl.values.hits}}
In results released to the Colombo Stock Exchange, Haycarb reported a turnover of Rs. 2.5 billion and profit before tax of Rs. 256 million for the three months ending 30 June 2013. Profit after tax recorded for the quarter was Rs. 210 million, out of which profit attributable to the equity holders of the company was Rs. 200 million.
Haycarb Managing Director Rajitha Kariyawasan noted that the results demonstrate the consolidation of the record performance of the previous year, in spite of competition faced with softening of coconut carbon prices.
He explained that the significant price reduction offered during the past year and the current quarter to pass the benefit of the decreasing raw material prices to customers resulted in a decline of revenue in comparison with the first quarter of the previous year, whilst retaining strong sales volumes.
The price of the main raw material, coconut charcoal, increased in Sri Lanka and in India in the three months under review due to the drop in coconut crop production whilst the supply and demand dynamics is expected to result in an increase in charcoal prices in Indonesia. The manufacturing operations also faced increases in energy, salaries, wages and other overhead costs. This will exert significant pressure on the gross margins in the coming months.
Commenting on its investments, Kariyawasan said: “We are pleased to announce the successful commissioning of additional value added activated carbon manufacturing capabilities in Badalgama from July this year.
The construction of the second activated carbon manufacturing plant in Indonesia that commenced under PT Haycarb Palu Mitra is expected to be completed according to planned timelines in the first quarter of next calendar year.”
Further commenting on the forward outlook in the current financial year, Kariyawasan stated: “The coconut carbon market faces stiff competition as a result of increasing supply volumes. Significant challenges are faced by the gold mining industry as a result of a severe dip in the gold market prices, which is one of key coconut carbon applications, and is a cause for concern. We are cautiously managing our operations, noting short to medium tern revenue and margin implications due to these challenges.
“The product development initiatives to capture the value added product segments in the industry continues to be pursued rigorously with positive results whilst the marketing teams have worked progressively towards expansion of markets in new geographies and new market segments to mitigate the impact of current challenges and to achieve growth targets of the group,” Kariyawasan added.
The pioneer manufacturer of activated carbon in any coconut producing country, Haycarb operates manufacturing facilities in Sri Lanka, Thailand and Indonesia, supported by marketing offices in the UK, Australia and the USA, producing and marketing standard, washed and impregnated carbons in granular, pellet and powder form.
The Board of Directors of Haycarb comprises Mohan Pandithage – Chairman, Rajitha Kariyawasan – Managing Director, Arjun Senaratna, Ranjeevan Seevaratnam, Sarath Ganegoda, Dhammika Perera, Jeevani Abeyratne, Dushantha Ranaraja, Nimal Perera, Dr. Sarath Abayawardana and Sujeewa Rajapakse.
