Hayleys 1Q profits dip

Saturday, 9 August 2014 00:25 - - {{hitsCtrl.values.hits}}

Hayleys Plc yesterday reported a 15% decline in post-tax profits in the first quarter though top line showed a healthy growth. Consolidated profit after tax in the three months ended on 30 June 2014 was Rs. 783.3 million, down by 15% from a year earlier. Net profit attributable to equity holders was Rs. 366.8 million, down from Rs. 418.4 million in the first quarter of FY13. Pre-tax profit was down 12% to Rs. 1.08 billion. Results from operating activities were down by 12% to Rs. 1.57 billion. Higher administrative and distribution expenses contributed to the dip in bottom line.

Group revenue however saw a 17% growth to Rs. 22.6 billion whilst gross profit was up by only 2% to Rs. 4.66 billion. Meanwhile in a statement Hayleys said the Group maintained growth momentum to achieve a revenue growth of 17% amounting to Rs. 22.6 billion in value terms. It was also noteworthy that all sectors in the Group maintained positive operating profits during the quarter under review. The Purification Sector reported a turnover of Rs. 2.4 b and PBIT of Rs. 157.7 m for 1Q 2014/15. The sector’s operations faced significant challenges during the first quarter of the year, as raw material prices increased approximately 20% compared to the previous year. The Hand Protection sector demonstrated commendable recovery from a constrained operating environment in the previous financial year. The Sector reported a turnover of Rs. 3.4 b and PBIT of Rs. 331.7 m for 1Q 2014/15. During the reporting period the sector commissioned commercial operations of a new manufacturing facility; DPL Premier Gloves Ltd. The Group’s Fibre and Textiles sectors, both of which have demonstrated strained performance in recent years, showed positive growth in 1Q 2014/15, as restructure initiatives in each of the sectors yielded results. Both sectors enjoyed significant revenue growth and recorded positive operating profits during the first quarter. Agriculture and Plantations had a challenging first quarter in the face of adverse weather, as the protracted drought impacted productivity of the two sectors. The Plantation sector was also impacted by the decline in global rubber prices. The Plantation sector changed its financial reporting period to 31 March from 31 December. Accordingly, three additional months have been consolidated this quarter, which are reflected in the figures. The Power and Energy Sector sustained growth during the quarter with Industry Inputs demonstrating a 146% growth in profitability against the 1Q of the preceding financial year. The Consumer Products Sector maintained turnover at Rs. 1.2 b, sustaining the top-line to the previous year’s threshold. Transportation and Logistics continued to demonstrate commendable growth with sustained enhancement of returns from the sector, as turnover and profitability increased by 8% and 5% respectively against 1Q of 2013/14. The Leisure and Aviation sector recorded mixed results, with The Kingsbury maintaining its growth momentum. Chairman and Chief Executive Mohan Pandithage speaking on the outlook for the next three quarters noted: “We are encouraged by the fact that in 1Q, all sectors performed well. We are also pleased to note that DPL Premier Gloves has commenced operations in 1Q.” The Board of Directors of Hayleys PLC comprises Mohan Pandithage (Chairman and Chief Executive), Dhammika Perera (Deputy Chairman), Rizvi Zaheed, Nimal Perera, Sarath Ganegoda, Rajitha Kariyawasan, Dr. Harsha Cabral PC, Dr. Mahesha Ranasoma, Mangala Goonatileke, Lalin Samarawickrama , Ruwan Waidyaratne and Hisham Jamaldeen.

Bourse up for 3rd session; hovers near 3-year high

Reuters: Stocks rose to a near three-year closing high on Friday as hopes of a policy rate cut and further fall in interest rates led investors to snap up banking and diversified shares amid continued buying by foreign investors. The main stock index edged up 0.15%, or 10.05 points to 6,918.23, its highest close since 13 September 2011. It has risen 17% so far this year. “The market continued its run on low interest rates, good results and continued foreign buying,” said a stockbroker requesting not to be named. Foreign investors bought a net Rs. 346.6 million worth of shares on Friday, extending the year-to-date net foreign inflow to Rs. 12.03 billion. Turnover was Rs. 1.58 billion ($12.14 million), more than this year’s daily average of about Rs. 1.11 billion. Stockbrokers said investors had “no option” but to buy into stocks due to low interest rates as the market is expecting another rate cut during the 15 August policy rate announcement. Central Bank Chief Ajith Nivard Cabraal on Thursday said there was a greater chance of a cut, rather than a hike, in key policy rates, a day after yields on one-year Government debt fell below the rate of 6.50% at which the Central Bank mops up liquidity from commercial banks. Hopes over strong earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $22 billion-worth stock market. Gains were led by Distilleries Company of Sri Lanka Plc which rose 2.99% to Rs. 210.90 a share while DFCC Bank rose 2.51%% to Rs. 175.40. The index has been in the overbought region since 3 July, as local investors moved funds from fixed income to riskier assets such as shares because of low interest rates and foreign buying.

Rupee firmer on inflows; State banks cap rise

Reuters: The rupee closed a tad firmer on Friday on inflows from exports and remittances, even as two State banks lowered the dollar-buying rate to prevent a sharp appreciation in the local currency, dealers said. The rupee ended at 130.17/18 per dollar, firmer from Thursday’s close of 130.19/20. “The state banks lowered the buying rate by two cents. There are regular inflows, but not much of importer demand,” said a currency dealer. Dealers said the two State banks lowered the dollar-buying rate to 130.17 while higher liquidity due to dollar purchases by banks put downward pressure on market interest rates. Central Bank Chief Ajith Nivard Cabraal said on Thursday there was a greater chance of a cut, rather than a hike, in key policy rates, a day after one-year Government debt yields fell below the rate of 6.50% at which the Central Bank mops up liquidity from commercial banks. The yield on one-year T-bills fell to as low as 6.30% in the secondary market on Friday, dealers said. Two Central Bank officials told Reuters on Wednesday that the monetary authority bought $218 million from the market on Tuesday and over $1 billion this year through Tuesday. The Central Bank’s dollar purchases from the market to support exporters have increased rupee liquidity and sent yields on government securities lower amid lacklustre demand for private credit and imports, dealers said. A Central Bank official said last month the rupee would have risen to 125 per dollar had the Central Bank not intervened. The IMF last week urged Sri Lanka to limit its intervention in the foreign exchange market, a week after Finance Secretary P.B. Jayasundera said Sri Lanka was building up its foreign exchange reserves while keeping the rupee stable with the country seeing more inflows.