Haycarb profits surge 23% despite supply challenges

The pioneering coconut shell-based activated carbon manufacturer, Haycarb PLC, reported earnings of Rs.7.08 per share for the October – December quarter 2016, up from Rs.5.74 a share reported a year ago despite the continued cost pressure stemming from the shortage of charcoal supplies.

The net profit rose by 23.4 percent from a year ago to Rs.210.4 million for the quarter.

Revenue rose by almost 21 percent to Rs.3.47 billion yearon-year (YOY) but the cost of sales rose by a little under 25 percent YOY to 2.62 billion YOY.

The company continued to face challenges in some locations due to the shortage of charcoal caused by the adverse weather conditions that prevailed in 2016, the company said in a post earnings release.

Thailand is one of the key charcoal suppliers. However, the company’s move to strengthen its raw material supply chain networks in other key locations contributed to sustaining charcoal supplies.

“The company continues to invest in acquisition of new customer accounts and product segments backed by continued focus on product development and commercialization of value-added products that show positive results,” said Haycarb Managing Director Rajitha Kariyawasan.

The group has manufacturing facilities in Sri Lanka, Thailand and Indonesia and marketing offices in the USA, UK and Australia.

“We also continued to expand the sales volumes globally in our key markets. The challenges of cost increases were partially offset through lean and productivity improvement measures that resulted in increased efficiencies in processes and supply chain,” Kariyawasan added.

Meanwhile, for the nine months ended December 31, 2016, the Hayleys group subsidiary reported earnings of Rs.17.08 a share or Rs.507.3 million, up 19 percent YOY. The top line rose by a modest 12 percent YOY to Rs.9.42 billion.

Kariyawasan said Haycarb’s environmental engineering arm, Puritas (Pvt.) Ltd, had continued to make steady progress increasing its regional presence and expressed optimism of continued growth momentum. Hayleys PLC held a 67.73 percent stake in the Haycarb group while the state-controlled private sector pension fund, the Employees’ Provident Fund, held a 4.77 percent stake as at December 31, 2016 being the second largest shareholder.