Sri Lanka’s diversified conglomerate, the Hayleys Group, demonstrated strong resilience in the 3rd quarter of 2019/20 to achieve a 41 percent growth in profit-after-tax.
The robust performance during the quarter enabled the Group to offset the subdued performance of the previous quarters, with the Group’s profit-after-tax increasing by 18 percent on a cumulative basis during the 9 months up to December 2019.
Profitability was upheld by broad-based improvements in the operating performance of the Group’s export-oriented businesses.
Turnover declined marginally to Rs.160.6 billion in 9 months, mainly reflecting reductions in the Leisure, Transportation and Consumer & Retail segments while other sectors including Purification (+23%), Textiles (+15%), Hand Protection (+4%) and Industry Inputs (+18%) recorded top-line growth.
Improvements in the core performance of key sectors, particularly across export-oriented business lines is reflected in the 9 percent increase in Consolidated Earnings before interest, tax, depreciation, and amortization (EBITDA) to Rs.16.3 billion during the period.
Meanwhile, Consolidated operating profit also recorded an increase of 9 percent to Rs.12.3 billion, driven by Purification (+81%), Textiles (+83%), Hand Protection (+45%) and Industry Inputs (4 fold increase) among others.
The Leisure, Retail, Construction Materials sectors continue to be adversely impacted by challenges stemming from the operating environment. The growth in Group operating expenses was contained at 4% reflecting ongoing investments in lean initiatives and process efficiencies.
Consolidated finance costs increased by 9 percent to Rs.8.4 billion during the period, although the quarter recorded a reduction of 1 percent reflecting the gradual decline in interest rates. The Group’s consolidated pre-tax profit increased by 11 percent to Rs.3.9 billion while profit after tax also grew to Rs.2.2 billion from 1.9 billion, a commendable achievement given the operating conditions. Meanwhile, total assets increased by 4 percent to Rs.242.2 billion by end-December 2019.
“The recently announced tax concessions are likely to result in improved consumer and investor sentiments presenting upside potential for the Group. Additionally, we are confident that the continued growth of our export businesses, coupled with the reduction in lending rates will support the Group’s earnings growth in the coming months” said Mohan Pandithage, Chairman and Chief Executive of Hayleys.