The Hayleys Group, Sri Lanka’s most diversified conglomerate, demonstrated strong resilience in the third quarter of 2019/20 to achieve a 41% growth in profit-after-tax.
Hayleys Chairman/CEO Mohan Pandithage (left) and Hayleys Co-Chairman Dhammika Perera
The robust performance during the quarter enabled the Group to offset the subdued performance of the previous quarters, with the Group’s profit-after-tax increasing by 18% on a cumulative basis during the nine months up to December 2019. Profitability was upheld by broad-based improvements in the operating performance of the Group’s export-oriented businesses.
Turnover declined marginally to Rs. 160.6 billion in nine months, mainly reflecting reductions in the Leisure, Transportation and Consumer and Retail segments while other sectors including Purification (+23%), Textiles (+15%), Hand Protection (+4%) and Industry Inputs (+18%) recorded top line growth.
Improvements in the core performance of key sectors, particularly across export-oriented business lines is reflected in the 9% increase in consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) to Rs.16.3 billion during the period.
Meanwhile, consolidated operating profit also recorded an increase of 9% to Rs.12.3 billion, driven by Purification (+81%), Textiles (+83%), Hand Protection (+45%) and Industry Inputs (fourfold increase) among others. The Leisure, Retail and Construction Materials sectors continue to be adversely impacted by challenges stemming from the operating environment. The growth in Group operating expenses was contained at 4% reflecting ongoing investments in lean initiatives and process efficiencies.
Consolidated finance costs increased by 9% to Rs. 8.4 billion during the period, although the quarter recorded a reduction of 1% reflecting the gradual decline in interest rates. The Group’s consolidated pre-tax profit increased by 11% to Rs. 3.9 billion while profit after tax also grew to Rs. 2.2 billion from 1.9 billion, a commendable achievement given the operating conditions. Meanwhile, total assets increased by 4% to Rs. 242.2 billion by end-December 2019.
The Hayleys Group continued to demonstrate excellence in its corporate reporting practices, winning an impressive 11 awards at the 55th Annual Report Awards organised by CA Sri Lanka, including six Gold Awards. Hayleys PLC won the Gold Award in Diversified Holdings (Groups above 10 subsidiaries) and the Silver Award for Overall Excellence in Financial Reporting.
“The recently-announced tax concessions are likely to result in improved consumer and investor sentiments presenting upside potential for the Group. Additionally, we are confident that the continued growth of our export businesses, coupled with the reduction in lending rates, will support the Group’s earnings growth in the coming months,” said Hayleys PLC Chairman and Chief Executive Mohan Pandithage.
The Board of Directors of Hayleys PLC comprises Mohan Pandithage (Chairman and Chief Executive), Dhammika Perera (Co-Chairman), Sarath Ganegoda, Rajitha Kariyawasan, Dr. Harsha Cabral PC, Ruwan Waidyaratne, Hisham Jamaldeen, Aravinda Perera, Jayanthi Dharmasena ,Rohan Karr and Gamini Gunaratne.