Hayleys 1Q in red amid tougher operating conditions, higher borrowing costs
Hayleys PLC, Sri Lanka’s largest conglomerate by revenue, turned a net loss for the April – June quarter (1Q18) as the performance of some of the group’s key business segments were impacted by tougher supply, market and weather conditions while the higher borrowing cost also weighed on.
The interim financial accounts showed the group recording a net loss of Rs.2.00 a share or Rs.149.7 million loss against a net profit of Rs.356.1 million year-on-year (YOY). But the top-line recorded a growth of 21 percent YOY to Rs.29.2 billion, mainly supported by the group’s transportation and logistics business.
The group’s transportation and logistics segment made a revenue of Rs.7.24 billion during the quarter while making an operating profit of Rs.430.9 million, up from Rs.288.2 million YOY.
Hayleys group became the highest revenue making listed entity in Sri Lanka when it recorded Rs.111.8 billion for the financial year ended March 31, 2017.
Besides logistics, the group has interests in purification, agriculture, construction materials, leisure and power and energy.
According to Hayleys, the group accounts for approximately 3.53 percent of Sri Lanka’s export income, and 3.4 percent of tea and 3.8 percent of rubber production.
“Despite lower profits during the first quarter, we remain confident that group profits will rebound over the coming quarters as multiple strategic investments made over the recent past begin to generate returns and contribute positively towards group profitability”, said Hayleys Chairman and Chief Executive Mohan Pandithage in a statement. During the 12 months to June 30, 2017, group borrowings rose by about Rs.13 billion due to enhanced investments made in key businesses.