Disappointing Year

May 17, 2006 (LBO) – Sri Lanka's Hayleys Ltd Wednesday reported a 24 percent drop in net profits for the financial year ended March 31, due to higher input costs in its various subsidiaries. Hayleys, which has diversified interest in power, rubber products, coir, transport, agriculture, resorts and consumer durables, said group net profits were 586.3 million rupees, over a turnover of 24 billion rupees (up 23.5 percent) year-on-year.

Hayleys Chairman Rajan Yatawara described last year's performance as "disappointing to say the least."

"Instead of the predicted 50 percent increase both in group profits¦the result was a 24 percent decline. Needless to say, many of the benchmarks we set ourselves were not reached."

Nearly 50 percent of the group's sales growth came from export sales to foreign markets an indication of Hayleys' exposure to exchange rate movements, or lack of them.

Higher input costs from key business sectors such as Purification Products, Fibre and Hand Protection chipped away profits during the year.

Additionally, the Fibre and Purification Products sectors incurred losses attributable to the high costs and non-availability of raw materials, and