Haycarb 1Q profits dip 9% on high coconut charcoal prices
The net profit of Haycarb PLC, a unit of diversified Hayley’s group fell 9 percent YoY to Rs.199.9 million during the quarter ended June 30, 2013 (1Q13), impacted by higher coconut charcoal prices.
Significant price reductions implemented during last year to reflect lower raw material costs resulted in a 10 per cent YoY drop in revenue, recording Rs.2.49 billion during the quarter according to Haycarb Managing Director, Rajitha Kariyawasan.
Prices of coconut charcoal, the main raw ingredient in Haycarb products, have since rebounded within Sri Lanka and India due to a drop in production.
Kariyawasan noted that increased energy costs, salaries, wages and other overhead costs are expected to exert “significant pressure on gross margins in the coming months.”
He further noted that slumps in industries connected with coconut charcoal products, like the gold mining industry, were likely to exert additional pressure on margins.
“Significant challenges faced by the gold mining industry as a result of a severe dip in the gold market prices, which is one of key coconut carbon applications, is a cause of concern.
We are cautiously managing our opera- tions noting short to medium tern revenue and margin implications due to these challenges,” he stated.
In that context, Kariyawasan stated that product development initiatives were being pursued in order to capture the value added products segment while efforts to enter new markets had also been launched.
Earnings per Share was recorded at Rs. 6.73 during the quarter as compared with Rs. 7.37 EPS in the previous year.
Haycarb is a producer of activated carbon products maintaining manufacturing facilities in Sri Lanka, Thailand and Indonesia and supported by marketing offices in the United Kingdom, Australia and the United States.