Sri Lanka Hayleys profits down on lower margins, exports

June 04, 2009 (LBO) – Sri Lanka’s Hayleys said net profit for the 2008-09 financial year fell 31 percent to 311 million rupees from a year ago as the export-oriented group was hit by the global economic slump. Gross turnover rose five percent to 32 billion rupees in the year ended March 31, 2009, according to the group’s annual report released to the Colombo stock exchange.

The sale of Hayleys stake in DIMO and disposal of assets in loss-making firms contributed 134 million rupees to profit for the year and 1.1 billion in cash flow, it said.

Hayleys chairman N G Wickremeratne said the result would have been better if not for high local inflation and an over-valued rupee and the global economic slump that affected demand for the group’s products.

Margins in export business had shrunk to “virtually nothing” even before the economic crisis began, he said.

There were signs of global economic recovery with a “slight increase in interest from buyers in the western hemisphere, and in trade and shipping volumes” but uncertainty remains, he told shareholders in the annual report.

Wickremeratne, who retires at the end of June, said Hayleys was more exposed than most other firms to global