Hayleys Fabric 3Q net up on strong sales

 Hayleys Fabric PLC, the knit fabric maker of Hayleys group, reported solid performance for the three months ended December 31, 2018 (3Q19) as the company extended its positive earnings for the third quarter in a row supported by a strong top line performance. 

Hayleys Fabric reported earnings of 52 cents a share or Rs.107.6 million profit for the quarter under review from a loss of 5 cents a share or Rs.10.8 million reported for the same period last year. 

Hayleys Fabric returned to black in the first quarter ended in June 30, 2018 after a turbulent earnings record and since then the firm had been able to maintain the 
growth momentum. 

The third quarter earnings are also higher from the 8 cents it reported for the first quarter and the 36 cents reported for the second quarter. 

.Meanwhile, the company recorded revenues of Rs.3.5 billion for the quarter under review, up 64 percent from the same period last year. 
The cost of sales too rose by a similar amount to Rs.3.1 billion, resulting in a gross profit of Rs.374.0 million.

The company, whose functional currency is US dollars, may also have benefited from the weakening rupee against the dollar. 

The Sri Lankan rupee depreciated by 19 percent in 2018 against the US dollar. 

The strong order book for Sri Lankan apparel may also have boded well for the company’s solid performance during the first three quarters of 2018/19 as the Sri Lankan apparel sector closed the year strong. 

Hayleys Fabric is a significant player in the apparel value chain as it delivers 2.5 million metres of fabric each month to apparel manufacturers from its factory located in Narthupana Estate, Neboda in the Western Province.    

The company offers end-to-end solutions from design, development, printing, brushing and sueding of pure and blended polyester and cotton fabrics. 

Meanwhile, for the nine months ended December 31, 2018, the company reported earnings of 93 cents a share or Rs.193.8 million in total earnings against a loss per share of 10 cents or Rs.21.1 million reported for the corresponding period last year. 

The revenue for the period was Rs.8.6 billion, up 32 percent from a year ago. Hayleys PLC with its subsidiary companies holds 63.05 percent stake in Hayleys Fabric, while the Employees’ Provident Fund has 2.67 percent stake being the fourth largest shareholder after Hayleys group.