The Sri Lankan multinational Haycarb PLC reported a revenue of Rs. 7.1 billion and profit before tax of Rs. 296 million for the six months ending 30th September 2017. The profit after tax stood at Rs. 251 million.
Haycarb PLC Managing Director Rajitha Kariyawasan said that whilst the company continued to expand its market reach and recorded a healthy growth in turnover, the sharp increase in the price of its key raw material, coconut charcoal impacted its bottom line significantly. While the company made significant efforts to revise prices upwards through comprehensive discussions with its valued customers, the inability to pass the full impact of the raw material price increases and the lagging effect of price revisions has resulted in lower margins than last year. The company has successfully implemented initiatives to strengthen the raw material supply chain networks in Sri Lanka and Thailand during the period under review through its "Haritha Angara" program of assisting to build more environment friendly charcoal pits in Sri Lanka and by strengthening its own charcoaling operations in Thailand. However, the raw material availability in these two locations is expected to decline during the latter half of the year due to seasonal factors, a key challenge to be reckoned with. The raw material supply chain in Indonesia has recovered from the severe setback it suffered and is expected to improve further during the third and fourth quarters.
He further added, that "the current trend of shortages and resultant increases in prices of coconut charcoal is likely to continue in to the second half of the financial year in Sri Lanka and in India in particular. The company is in the process of negotiating further adjustments necessary to its sales pricing to the extent permissible based on the competitive market conditions. The adverse currency movements experienced in Thailand and Indonesia, where the company has a significant presence, can further aggravate the impact on margins." On a positive note he added that the company has achieved encouraging savings in its lean platforms and growth in some markets and value added product segments that signal potential for the future.
Haycarb PLC Managing Director Rajitha Kariyawasan said that whilst the company continued to expand its market reach and recorded a healthy growth in turnover, the sharp increase in the price of its key raw material, coconut charcoal impacted its bottom line significantly. While the company made significant efforts to revise prices upwards through comprehensive discussions with its valued customers, the inability to pass the full impact of the raw material price increases and the lagging effect of price revisions has resulted in lower margins than last year. The company has successfully implemented initiatives to strengthen the raw material supply chain networks in Sri Lanka and Thailand during the period under review through its "Haritha Angara" program of assisting to build more environment friendly charcoal pits in Sri Lanka and by strengthening its own charcoaling operations in Thailand. However, the raw material availability in these two locations is expected to decline during the latter half of the year due to seasonal factors, a key challenge to be reckoned with. The raw material supply chain in Indonesia has recovered from the severe setback it suffered and is expected to improve further during the third and fourth quarters.
He further added, that "the current trend of shortages and resultant increases in prices of coconut charcoal is likely to continue in to the second half of the financial year in Sri Lanka and in India in particular. The company is in the process of negotiating further adjustments necessary to its sales pricing to the extent permissible based on the competitive market conditions. The adverse currency movements experienced in Thailand and Indonesia, where the company has a significant presence, can further aggravate the impact on margins." On a positive note he added that the company has achieved encouraging savings in its lean platforms and growth in some markets and value added product segments that signal potential for the future.
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