• Also witnesses reduction in net finance costs due to lower interest rates
• Credits ‘Haysmart’ initiative for rationalization of costs and improving efficiencies

Diversified conglomerate and export major Hayleys PLC recorded higher operating profits for the quarter ended June 30, 2020 (1Q21) as the group managed to reduce its overheads while its export-oriented business performed strongly.

The group also saw a significant reduction in net finance costs thanks to lower interest rates despite higher short-term and long-term interest bearing borrowings a year ago.
The group revenue for the quarter under review fell 8 percent year-on-year (YoY) to Rs.48.2 billion, which was largely attributed to disruptions to the group’s leisure and transport & logistics businesses due to COVID-19 lockdowns and border closures.

The cost of sales for the period fell 11 percent YoY to Rs.35.7 billion, allowing the group to report a gross profit on par with last year. The administrative expenses for the quarter under review fell 10 percent YoY to Rs.5.7 billion, which the group attributed to its ‘Haysmart’ initiative launched to rationalize costs and improve efficiencies.
As a result, the group’s operating profit rose 11 percent YoY to Rs.3.6 billion.

Meanwhile, the group’s net finance costs fell 17 percent YoY to Rs.3.5 billion. The pre-tax and after-tax profit of the group rose over 100 percent YoY to Rs.1.17 billion and Rs.561.7 million respectively.

The group’s tax expenses rose 71 percent YoY to Rs.612.6 million.

However, for the quarter under review, the group reported negative earnings of Rs.3.80 per share of Rs.285.1 million compared to a loss of Rs.7.31 per share or Rs.548.5 million.
The group’s hand protection, purification, agriculture and plantations segments reported higher revenues and profits for the quarter under review.

“The purification and hand protection sectors have a strong pipeline of orders while the plantation sector is expected to benefit from the sustained improvement in tea prices,” Hayleys Chairman/CEO Mohan Pandithage  said.

The group’s leisure business saw its revenue plummeting and incurring losses due to pandemic-induced economic malaise. 

Hayleys Co-Chairman and business magnate Dhammika Perera controls little over 51 percent of the issued shares of Hayleys PLC while private sector pension fund, Employees’ Provident Fund (EPF) has 5 percent stake being the company’s third largest shareholder.