Hayleys records Rs 1.3 b profit

Highest ever profit after tax for nine months:

The Hayleys Group has achieved significant growth in profits at the end of the first nine months of 2009-10, with its businesses in global markets and manufacturing continuing their strong performance in the third quarter.

In results released to the Colombo Stock Exchange, Hayleys PLC reported that profit after tax more than doubled to Rs 1.3 billion, and that profit attributable to shareholders increased four and a half times to Rs 832 million over the corresponding nine months of last year.

Pre-tax profit for the period reviewed was up 61 per cent to Rs 1.7 billion, while turnover increased by 10 per cent to Rs 27.2 billion, the blue chip conglomerate said.

In a statement accompanying the figures for the nine months, Hayleys Chairman Mohan Pandithage said Hand Protection, Purification Products and the Fibre sectors had improved performances. The contribution from Textiles to profits had risen consequent to the Group’s increased shareholding in Hayleys MGT Knitting Mills, although the latter’s profits were slightly lower in the period under review.

In the Agri Sector, Agri Products showed improved results, Pandithage said. Agri Inputs continued to perform strongly, and the Consumer Sector recorded an improvement over the first nine months of the previous year.

Pandithage said portfolio realignment initiatives also contributed to the profit achieved. The overall improved performance from the Group has resulted in a marked increase in cash flow from operating activities.

Looking ahead, he affirmed that “Our optimism for the Group’s outlook for this financial year is endorsed by the result for the nine months ending 31st December 2009. We remain committed to seeking new business opportunities in agriculture, transportation, power and leisure, while other businesses will continue to explore avenues of expansion locally and overseas.”

The Group’s Income Statement for the nine months ending December 31, 2009 indicates that net finance costs were reduced by 31 per cent to Rs 564 million.

The Group’s Earnings per Share increased from Rs 2.46 a year earlier to Rs 11.09 for the period under review, an improvement of 351 per cent.

Among the principal contributors to Group performance, Hand Protection accounted for Rs 6.7 billion in turnover and Rs 646 million in operating profit; Purification Products Rs 3.7 billion and Rs 518 million in turnover and operating profit respectively and Agri Inputs Rs 3.4 billion in turnover and Rs 311 million in operating profit.

The Textiles sector, with Hayleys MGT Knitting Mills now accounted for as a subsidiary business, contributed Rs 2.4 billion to turnover and Rs 172 million to operating profit. Fibre, with a 47 per cent improvement in its contribution to operating profit (Rs 113 million) and Agri Products which converted a loss of Rs 17 million at the end of the third quarter of the previous year to an operating profit of Rs 117 million, were among other noteworthy contributors to the Group’s results.

The Plantation sector, handicapped by a mandatory wage increase of over 40 per cent, managed a remarkable turnaround on improved crop yields and higher auction prices during the latter part of the year, Pandithage commented.

He said results in the Transportation sector though positive, performed below expectation due to the lingering effects of the global recession on some of the sector’s new business initiatives, particularly in the fields of international freight and logistics.