Haycarb ups turnover, profits dip

The Sri Lankan multinational Haycarb PLC has reported a revenue of Rs. 7.1 billion up by 20% and profit before tax of Rs. 296 million down by 35% for the six months ending 30 September. The profit after tax stood at Rs. 251 million, down by 33% from the corresponding period of last year.

Haycarb PLC Managing Director Rajitha Kariyawasan said that whilst the company continued to expand its market reach and recorded a healthy growth in turnover, the sharp increase in the price of its key raw material, coconut charcoal impacted its bottom line significantly. While the company made significant efforts to revise prices upwards through comprehensive discussions with its valued customers, the inability to pass the full impact of the raw material price increases and the lagging effect of price revisions has resulted in lower margins than last year. 

The company has successfully implemented initiatives to strengthen the raw material supply chain networks in Sri Lanka and Thailand during the period under review through its ‘Haritha Angara’ program of assisting to build more environment friendly charcoal pits in Sri Lanka and by strengthening its own charcoaling operations in Thailand. However, the raw material availability in these two locations is expected to decline during the latter half of the year due to seasonal factors, a key challenge to be reckoned with. The raw material supply chain in Indonesia has recovered from the severe setback it suffered and is expected to improve further during the third and fourth quarters.

He further added that, “The current trend of shortages and resultant increases in prices of coconut charcoal is likely to continue in to the second half of the financial year in Sri Lanka and in India in particular. The company is in the process of negotiating further adjustments necessary to its sales pricing to the extent permissible based on the competitive market conditions. The adverse currency movements experienced in Thailand and Indonesia, where the company has a significant presence, can further aggravate the impact on margins.”

On a positive note he added that the company has achieved encouraging savings in its lean platforms and growth in some markets and value added product segments that signal potential for the future. 

Kariyawasan said that the environmental engineering arm Puritas Ltd., will contribute positively to the top and bottom lines in the second half of the year and expressed confidence on this segment’s continued growth and potential for the future. 

In the background of increasing emphasis on environmental sustainability worldwide Haycarb remains positive in its medium to long term outlook in its activated carbon and water treatment systems businesses.

Haycarb is the pioneer manufacturer of coconut shell activated carbon in any coconut producing country with manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the USA, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes whilst remaining a leading and technologically superior manufacturer in its chosen segment.