Higher finance costs continue to hurt Hayleys despite strong top line
Despite a strong top line performance, the bottom line of Sri Lanka’s diversified blue chip Hayleys PLC fell victim to significantly higher finance costs stemming from recent acquisitions and the exchange rate fluctuations.
Hayleys, which celebrated its 140th anniversary this year, saw its revenue for the September quarter (2Q19) rising 58 percent year-on-year (YOY) to Rs.52.4 billion.
The group operating profits also rose impressive 82 percent YOY to Rs.3.6 billion.
However, the group recorded negative earnings of Rs.1.91 per share or a loss of Rs.143.4 million for the quarter under review against earnings of Rs.2.24 per share or Rs.168.3 million reported for the corresponding period of the previous year.
The group bottom line was impacted by a net finance cost to the tune of Rs.2.6 billion stemming from the group’s acquisition of Singer (Sri Lanka) group largely on bank borrowings.
Meanwhile, for the six months ended September 30, 2018, the group revenue topped Rs.103 billion, up 65 percent YOY.
However, the group recorded negative earnings of Rs.5.39 per share or a loss of Rs.404.6 million for the first half of FY19 compared to earnings of 25 cents a share or Rs.18.6 million reported for the first half of FY18.
All segments except for Plantations contributed to the healthy expansion in turnover for the Group during the first half of FY19.