Haycarb posts 1Q sales of Rs 1.7 b, PBT of Rs 162 m

Strong global demand for activated carbon has generated robust revenue growth for Haycarb PLC in the three months ending 30 June 2011, but escalating raw material prices impacted its margins.

According to financial statements filed with the Colombo Stock Exchange yesterday, the Hayleys Group’s multi-national activated carbon manufacturing business recorded a turnover of Rs 1.7 billion for the first quarter of 2011-12, achieving growth of 20% over the corresponding three months of the previous year.

The company also recorded a profit before tax of Rs. 162 million that was a reduction of 22% from the same quarter last year.  Profit after tax for the first quarter stood at Rs. 137 million.

Top line growth was attributed to the increase in the sales prices to manage the escalating raw material costs, and to a greater emphasis on higher value products in Haycarb’s product mix out of manufacturing plants that operated at maximum capacity.

Haycarb Managing Director Rajitha Kariyawasan said the company’s operations worldwide had to absorb continuing very sharp increases in charcoal prices, amidst scarcity of supply, resulting in a drop in margins compared to the preceding quarter of the last fiscal year.

“However, we are encouraged by the fact that our strategy of moving up the value chain is yielding results, while  worldwide demand for activated carbon remains strong,” Kariyawasan said.

“Nevertheless, the shortages and continued sharp increases in prices of charcoal are serious concerns, that need to be mitigated through both short term and long term strategies to ensure that the Group meets this challenge effectively,” he said.

“In the short term we need to ensure the charcoal procurement strategy is effectively managed for us to remain a leading player with a reputation for reliability and being a quality supply source, whilst ensuring that our loyal customers understand the need to revise prices in a timely manner to ensure the adverse impact of charcoal prices are compensated for adequately.”

“In the medium to long term we are aggressively looking into the expansions overseas, further value addition and broad basing our product and business portfolio as immediate priorities,” he added.  The pioneer manufacturer of activated carbon in any coconut producing country, Haycarb is also the world’s largest producer of coconut shell-based activated carbon. The Group, whose manufacturing facilities in Sri Lanka, Thailand and Indonesia are supported by marketing offices in the UK, Australia and USA, produces standard, washed, and impregnated carbons in granular, pellet and powder form.

The Board of Directors of Haycarb PLC comprises A. M. Pandithage – Chairman; H. S. R. Kariyawasan - Managing Director; R. P. Peris, R. Seevaratnam, A. M Senaratna, K. D. D. Perera, S. C. Ganegoda, M. J. A. S. Abeyratne, D. E. Ranaraja, W. D. N. H. Perera and Dr. S. A. K Abayawardana.