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03 Nov 2014
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Hayleys MGT 2Q net profit improves 44%

Hayleys groups knitted fabric manufacturer, Hayleys MGT Knitting Mills PLC (MGT) today reported results for the second quarter ended September 30, 2014.

MGT posted a net profit of Rs.31.74 million (US $ 241,059) for the quarter ended September 30, 2014 (2Q15), up 44 percent from a year ago, according to the interim financial results. The earnings per share rose to 18 cents from 13 cents during the same period.

The company's business expanded during the 2Q15 as its revenue rose by 3 percent year-on-year (YoY) to Rs.2.31 billion (US S 17.58 million), while its gross profits were 12 percent higher at Rs.241.92 million (US S 1.84 million), despite a 2 percent YoY rise in its cost of sans to Rs.2.07 billion (US S 15.74). However, there was a surge in distribution expenses by 231 percent YoY to Rs.40.5 million but the administration expenses were down 10 percent to Rs.129 million from a Year ago. The net financing cost was slightly down to Rs.37.56 million leaving a profit before tax of Rs.34.85 million, up 55 percent a year earlier.

The company's functional currency is the United States dollar as its primary business is done in dollars but the presentation currency - the currency which the financial statements are prepared - is Sri Lankan rupees.

During the quarter, the company raised Its.526.3 million via a rights issue in order to retire its tasting debts as a measure to strengthen its balance sheet.

The fund management arms of family, controlled Carson Cumberbatch Group, Guardian Fund Management Group was seen buying into MGT until recently and the total stake by the group as of September 30, 2014 stood at little above 15 percent, being the second largest shareholder in the company.

Hayleys MGT Knitting Mills has been reporting lasses since the company reported a fraud relating to stocks in 2011 and the losses for the year ended March 31, 2014 were Rs.183.31 million (US $ .1.39million). However, the future industry outlook remains positive despite the presence of much larger competitors such as Textured Jersey Lanka PLC and Ocean Lanka limited — both are units of Brandix Lanka, Sri lanka's largest apparel exporter due to the enroll positive micro-economy conditions and the recovery in the US economy. Meanwhile, for the six months ended September 30, 2014 (1H14), the company increased its net profits by as much as 150 percent YoY to 4.36.47 million on revenue of Rs.4.29 billion.

The company has an asset base of Rs.5.88 billion. Hayleys PLC had o 58.96 percent stake in the company as of end September.

Hayleys MGT Knitting Mills

Established in 1993, Hayleys MGT Knitting Mills PLC is the pioneer in textiles manufacturing in Sri Lanka. We provide end to end solutions from design to manufacturing of fabric made out of natural and synthetic fibers. Company also has the capability of in-house printing with 16-colour printing machines, fabric brushing machines and sueding machines. Hayleys PLC, our parent company, is the oldest conglomerate in Sri Lanka with interests in diverse business operations. Hayleys MGT Knitting Mills shares are listed on the Colombo Stock Exchange (symbol: MGT.N0000). For more information, go to www.hayleysmgt.com.

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