Aug 11, 2015 (LBO) – Profits at Sri Lanka’s diversified Hayleys group rose 42.5 percent to 522 million rupees in the June 2015 quarter, interim accounts showed.
The firm reported earnings of 6.97 rupees for the quarter 2015 compared to the last year earnings of 4.89 rupees on profits of 366 million rupees.
The group revenue declined 3 percent to 22,022 million rupees in the June quarter 2015.
Cost of sales also declined 6 percent to 16,942 million rupees in June quarter compared to 17,931 million rupees recorded in same period last year. This resulted in gross revenue of the firm to increase 9 percent to 5,079 million rupees for the first quarter ending June 2015.
Profit before taxes for the quarter was recorded at 1,190 million, up from 1,088 million during the same quarter in the previous year.
The Hayleys Chief said that all sectors of the company continued to make a positive contribution to the Groups bottom line but the plantation sector is facing a challenging situation.
“The tea and rubber industry in Sri Lanka and globally, is in the midst of one of the most prolonged depressions and strategies are being evaluated to overcome these challenges.” Mohan Pandithage, the chairman and chief executive of Hayleys PLC stated.
Revenue from the Plantations sector was affected by continued difficulties in key global markets for tea in the Middle East and Eastern Europe.
In this context, the prospect of another wage increase threatens to further increase production costs in the industry, Hayleys said.
The situation is compounded by a continued global downturn in latex prices, adversely affecting the rubber sector.
The Transportation and Logistics Sector profits before tax rose 98 percent to 372 million rupees in the quarter under review, which supported by continued improvements to its benchmark on service delivery and new business innovations.
The Purification Sector performed commendably despite a downturn in key markets and the weakening of the Euro, and recorded a PBT of 222 million rupees.
The Hand Protection Sector contributed 196 million rupees in profits to Group PBT, a reduction for the same period in the previous year.
“This was mainly on account of pressure on margins due to strong competition from the manufacturers in the region.” The company said.
The agriculture sector reported a PBT of 187 million rupees while the revenue from the construction material sector increased to 793 million rupees in the first quarter, reflecting continued growth in the construction industry.
Hayleys Textiles sector continued its upward momentum recording a profit before tax of 43 million rupees for the quarter consolidating its turnaround.