Strong revenue growth at Hayleys in 2010/11

Hayleys Plc said yesterday it has reported turnover of Rs. 54.4 billion and profit before tax of Rs. 2.1 billion for the 12 months ending 31 March 2011, a year in which strong performances in most business sectors were recorded.

The Blue Chip conglomerate’s businesses in agriculture, plantations, consumer products and transportation turned in significantly better results in the year concluded, while purification and hand protection sustained performance in challenging operating conditions, figures filed with the Colombo Stock Exchange show.

Two businesses in global markets and manufacturing – textiles and fibre – posted losses. The loss in the textiles business was largely due to the writing down of current assets to reflect the net realisable values. The loss in the fibre business on the other hand, was due mainly to debilitating raw material shortages.

Nevertheless, all business sectors, including textiles and fibre, reported healthy revenue growth in the year under review, enabling Hayleys PLC to improve its top line by a noteworthy 43 per cent or Rs. 16.4 billion over the 12 months, underscoring the sustainability of the group’s business portfolio.

Profit before tax during the period under review was Rs. 2.1 billion, while profit after tax stood at Rs. 1.2 billion.

A consolidation of the Group’s interests in plantations with an increase in its stake in Talawakelle Tea Estates PLC (TTEL), the forward integration made possible by its acquisition of Mabroc Teas and the acquisition of the Alumex Group had all contributed positively to the results and would be significant to future growth, Hayleys Chairman Pandithage said.

Citing an example, he pointed out that the Group’s construction materials sector, newly created after the Alumex acquisition, had contributed Rs. 1.38 billion to turnover and Rs. 137 million to operating profit since its acquisition on 4 November 2010.

Among the best performing sectors in the year reviewed, Agriculture, excluding plantations, contributed Rs. 7.4 billion to turnover and Rs. 721 million to operating profit, with growths of 27 per cent and 35 per cent respectively.

The plantations sector, which contributed Rs. 16 million to operating profit in 2009-10, increased its contribution to Rs. 632 million. Turnover in this sector improved by 90.5 per cent to Rs. 4.6 billion due to the increase in the Group’s shareholding in Hayleys Plantation Services Ltd.

        

The turned-around Consumer Products sector achieved an 8.6 per cent increase in its contribution to turnover (Rs. 3.8 billion) and a 32 per cent improvement in its contribution to operating profit (Rs. 236.7 million).

The transportation and logistics sector’s contribution of Rs. 4.7 billion to Group turnover reflected an increase of 35 per cent, while its contribution to operating profit grew 18.2 per cent to Rs. 558 million.

Purification products contributed Rs. 643 million to operational profit and Rs. 6.3 billion to turnover, which was an improvement of 25 per cent.

Nirmalapura Wind Power (Private) Limited, the subsidiary of Hayleys into electricity generation from wind power is under construction off Kalpitiya. This 10MW power plant is expected to be in commercial operation by September 2011, and would bring in a worthwhile contribution to the Group’s profitability in the coming years, Pandithage said.

Established in 1878 and adjudged Sri Lanka’s ‘Best Corporate Citizen’ four times, the Hayleys Group employs more than 30,000 people and accounts for 2.45 per cent of the country’s export income.

The Board of Directors of Hayleys PLC comprises A.M. Pandithage (Chairman and Chief Executive), L.K.B. Godamunne, M.R. Zaheed, A.M. Senaratna, J.A.G. Anandarajah, T.L.F. Jayasekera, K.D.D. Perera, W.D.N.H. Perera, S.C. Ganegoda, H.S.R. Kariyawasan, Dr. Harsha Cabral PC and Dr. M. Ranasoma.