Disappointing 3Q at Hayleys

Diversified blue chip Hayleys Plc has had a disappointing third quarter with net profit declining 27% to Rs. 534 million though first nine months figure remained unchanged at Rs. 1.68 billion over the corresponding period of last financial year.

After tax profit was down by 27% to Rs 981.5 million in 3Q and pre-tax profit was lower by 13% to Rs. 1.5 billion. Profit from operating activities was down 11% to Rs. 2.02 billion. Gross profit was Rs. 5.7 billion, up 3% from the 3Q of last year. Group revenue rose 2% to Rs. 23.6 billion.

In the first nine months Group revenue was down 1% to Rs. 67.6 billion but gross profit improved by 6% to Rs. 16.2 billion. Results from operating activities dipped by 5% to Rs. 5.6 billion and pre-tax profit declined by a similar percentage to Rs. 4.2 billion. Post-tax profit was down by 9% to Rs. 3 billion.

The Transportation and Logistics, Purification, Agriculture, Construction Materials, Industrial Inputs and Leisure segments of the business recorded growth during the period under review.  

“The Group’s results also reflect the challenges faced by the Plantations and Hand Protection sectors during the nine months in review,” said Hayleys statement on the interim results. 

The Plantation sector faced a number of challenges during the year including the global commodities crash which caused lower tea and rubber prices and lacklustre demand from traditional markets, compounded by inclement weather in Sri Lanka. The Hand Protection sector also faced significant mixed challenges from the global market as Sri Lanka faced relatively higher input prices compared to competing countries. The company has already initiated a number of projects to move into more value added hand protection products to overcome the price sensitivity in the mass produced glove segments. 

Hayleys Chairman and Chief Executive Mohan Pandithage said: “Most of our businesses performed well during the nine-month period. In recent years we have strategically initiated programs that will help us enhance competitiveness and the results of some of these actions will be visible over the next few quarters.”

The Board of Directors of Hayleys PLC comprises Mohan Pandithage (Chairman and Chief Executive), Dhammika Perera (Co-Chairman), Rizvi Zaheed, Nimal Perera, Sarath Ganegoda, Rajitha Kariyawasan, Dr. Harsha Cabral PC, Dr. Mahesha Ranasoma, Mangala Goonatilleke, Lalin Samarawickrama, Ruwan Waidyaratne and  Hisham Jamaldeen.