The iconic Sri Lankan multinational, Hayleys PLC, recorded outstanding growth in revenue and operating profits in the financial year ended 31st March 2019 (FY18/19).
The Group revenue expanded by 34% YoY to Rs. 219 bn while operating profit before interest increased by 40% YOY to Rs.15.9 bn. The Group Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) for FY 18/19 has improved to Rs. 21.3 bn from Rs.15.8 bn while the Finance Cost has increased from Rs.5.9 bn to Rs. 10.5 bn. The Group’s Profit Before Tax (PBT) reflect a 5% Year-on-Year (YoY) contraction to Rs 5.5 bn. In terms of revenue generation, the Group’s Consumer and Retail segment, which includes Singer (Sri Lanka) PLC recorded a turnover of Rs. 67.2 bn compared with Rs.35.9 bn in the previous year. The Transportation and Logistics segment generated Rs. 45.3 bn in turnover, from Rs. 35.6 bn in FY17/18.
The Purification segment achieved Rs. 20.9 bn in turnover, as compared with a previous Rs. 15.5 bn, while the Hand Protection segment recorded an increase in turnover from Rs. 15.9 bn to Rs. 17.1 bn. The Agriculture segment posted a turnover of Rs. 14.9 bn, from Rs. 13.9 bn in FY17/18.
In terms of segment results, the Group’s Consumer and retail segment made a contribution of Rs. 4.1 bn to Group operating profits despite margins being pressured as a result of import restrictions which came into effect during the year in review and a negative impact on the finance costs.
The Group’s Transportation and Logistics segment posted operating profits of Rs. 3.6 bn, over a previous Rs. 2.9 bn. The Agriculture sector reported an improved operating profit of Rs. 1.71 bn, against Rs. 1.15 bn in FY17/18.
Meanwhile, the Purification segment’s operating profits grew from Rs. 1.1 bn to Rs. 1.5 bn while Hand Protection operating profits posted an improvement from Rs. 471 mn to Rs. 834 mn. The Group’s Eco Solutions segment was successful in reversing an operating loss of Rs. 16 mn in FY 17/18 to an outstanding Rs. 440 mn operating profit in FY18/19.
Similar improvements were also demonstrated by the Group’s Textiles segment, which grew operating profits of Rs. 142 mn to Rs. 465 mn while the Group’s Leisure sector posted an operating profit of Rs. 665 mn, against Rs. 343 mn in FY17/18.
The Group’s Tea Export business, the Mabroc Brand helped the Plantations sector which is facing challenges from rising costs of production arising from increased wages in the final quarter of the year. The Plantations sector generated revenues of Rs. 13 bn, against a previous Rs. 12.6 bn and contained its reduction in operating profits to Rs. 737 mn, as compared with Rs. 887 mn in FY17/18.
However, increased net finance costs constrained bottom line performance at Hayleys as costs increased by 77% YoY to Rs. 10.5 bn in FY18/19, largely as a result of rising interest costs, consolidation of finance costs of Singer (Sri Lanka) PLC and acquisition cost of recently acquired businesses.
“As one of Sri Lanka’s single largest sources of value added exports, the Hayleys Group continues to be a major contributor to the Sri Lanka’s economy. Moving forward, the Group will continue to take strategic and focused measures aimed at rationalizing finances, however as a Group, we are ready for a challenging macroeconomic environment,” Hayleys PLC Chairman and Chief Executive Mr. Mohan Pandithage stated.