Haycarb records Rs. 13.5 b turnover; Rs. 1.19 b pre-tax profit in FY17

Sri Lankan multinational Haycarb Plc reported revenue of Rs. 13.5 billion, profit before tax of Rs. 1.19 billion and profit after tax of Rs. 939 million for the financial year 2016/17. The earnings per share of equity holders of the company increased to Rs. 27.07 for the year.

The Chairman of Haycarb Plc and its parent company Hayleys Plc Mohan Pandithage said that the company posted a profit before tax of over Rs. 1 billion for the fifth consecutive year, signalling the success of diversification and the resulting stability of the businesses driven by its long-term strategies.

Haycarb Plc Managing Director Rajitha Kariyawasan explained that the company was able to show both top and bottom line growth amidst key challenges in the supply chain for raw materials and volatility in some of its key global markets. 

He added that successful development and commercialisation of a number of value-added high margin products, expansion of its strategic customer base and growth shown in key geographic markets, together with the significant growth shown in the environmental engineering segment of the business (Puritas), helped to retain the overall performance of the group. He also said that cross functional teams delivered significant improvements in efficiencies and cost savings that added to the bottom line through lean projects that increased yields of specific equipment and product lines and reduced re-work.

The biggest challenge faced by the group in the 2016/17 fiscal year was the significant shortages in charcoal supplies and resultant high prices in its Indonesian operations as a result of significant coconut crop reduction which impacted the results negatively. This was compounded by the oversupply of activated carbon from low-cost manufacturers from India and the Philippines resulting in the company not being able to pass on the cost increases to the end customer. 

Kariyawasan noted that a significant portion of raw material sourced in Sri Lanka and Thailand was procured through environmentally friendly charcoaling initiatives that have been developed and promoted amongst suppliers by providing technology and financial assistance. The company continued to promote ‘Haritha Angara’, the environment friendly charcoaling pits in Sri Lanka, as a strategic initiative, while Carbokarn supported the operation of the vertical charcoaling kiln facility.

The performance of Sri Lankan entities significantly improved due to higher production throughput, increase in the value added portfolio and stability in raw material prices achieved through its ‘Haritha Angara’ program. He added that a notable performance was reported by the Thailand operations, which included satisfactory growth in the regeneration business. 

Kariyawasan said the environmental engineering arm Puritas Ltd. has shown creditable growth in its performance by expanding its share in waste water and water purification solutions in Sri Lanka and in the region. The significant growth shown by this segment in the last couple of years and its potential to further diversify and grow will strengthen the overall group he added.

“Haycarb plays a leading role in the flagship CSR initiative of our parent company Hayleys Plc. ‘Puritas Sath Diyawara’ leverages on the technical knowhow of the environmental engineering business to provide purified drinking water to persons affected by the chronic kidney disease (CKD) in the Central and North Central provinces of Sri Lanka. We are pleased to note that four more projects were commissioned during the year. The initiative now provides 130,000 litres of purified drinking water per day to nearly 25,500 persons spread across 16 villages,” he said.

Kariyawasan stated that the company remained confident of its position of strength and stability in the activated carbon industry, regeneration services and the environmental engineering segment to continue the growth platform in the background of continued emphasis placed on environmental sustainability, standards and regulations globally. 

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 US, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes and is a leading and technologically superior manufacturer in its chosen segment. 

The Board of Directors of Haycarb Plc comprises Chairman Mohan Pandithage, Managing Director Rajitha Kariyawasan, Dhammika Perera, Arjun Senaratna, Sarath Ganegoda, Jeevani Abeyratne, Dr. Sarath Abayawardana, Sujeewa Rajapakse, M.S.P. Udaya Kumara, Brahman Balaratnarajah, Sharmila Ragunathan, Ali Caderbhoy, James Naylor and M.H. Jamaldeen.