Hayleys Group reports improved performance in the 2nd quarter 2019/20

The Hayleys Group has posted improvements in turnover, operating performance and overall profitability during the second quarter of 2019/20 supported by the strong performance of its export businesses.

The group has recorded an improvement in turnover and operating profit for the 1H of 2019/20, although overall profitability was pressured by an increase in finance costs and persistent industry challenges in the Retail and Leisure sectors, the company said in a media release.

The group posted a turnover of Rs.105.4 billion (up by 2 per cent from the corresponding 2018/ 19 period) during 1H2019/ 20, supported by topline growth in Purification (+ 26 per cent), Textiles (+ 32 per cent), Hand Protection (+2 per cent) and Industrial Inputs (+20 per cent).

Improvements in the core performance of key sectors, particularly in export-oriented business lines was reflected by the 5 per cent increase in Consolidated Earnings before interest, tax, depreciation and amortisation ( EBITDA) to Rs.9.7 billion during the period.

Consolidated operating profit also grew by 5 per cent to Rs.7.1 billion, driven primarily by the Purification (+ 70 per cent), Eco Solutions (+ 41 per cent) and Textiles (+ 169 per cent) sectors.

The release said that Haycarb PLC, the group’s Purification Sector, achieved strong growth driven by the continued expansion of its value-added product portfolio as well as ongoing focus on lean manufacturing and supply chain initiatives. Meanwhile, the Retail and Leisure Sectors continue to be adversely impacted by the unfavourable operating l andscape and macro - economic challenges.

The group’s 2Q performance improved in comparison to the corresponding period last year, with profit before tax increasing by 18 per cent to Rs. 1.2 billion and profit after tax increasing by 40 per cent to Rs. 714.3 million. Consolidated finance costs increased by 7 per cent to Rs.6.6 billion resulting in the group’s consolidated pre- tax profit declining by 19 per cent to 1.5 billion. The group’s total assets amounted to Rs.238.5 billion by end-September 2019, an increase of 3 per cent compared to endMarch 2019.

“We remain optimistic regarding the group’s performance in the coming quarters given the anticipated recovery of the country’s retail and tourism sectors, the expected reduction in finance costs and the continued growth of our export businesses,” said Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC.