Sector Reviews
Power and Energy
Business Domain
The Sector is a business to business supplier of industrial chemicals, machinery and equipment and renewable resource based power generation. The Sector comprises 12 companies, with all based locally.
Key Performance Indicators
| Indicator | Measure | Unit | FYE 31st March | ||
| 2013 | 2012 | 2011 | |||
| Growth | Revenue | Rs. mn | 2,431 | 1,577 | 2,291 |
| Earnings Before Interest and Tax | Rs. mn | 683 | 286 | 215 | |
| Profit After Tax | Rs. mn | 436 | 124 | 165 | |
| Assets (Avg) | Rs. mn | 4,364 | 4,639 | 2,864 | |
| Capital Employed | Rs. mn | 3,807 | 3,979 | 2,374 | |
| Profitability | Return on Average Capital Employed* | % | 17 | 7 | 11 |
| Liquidity | Current Ratio | Times | 1.2 | 1.2 | 1.1 |
| Stability | Gearing | % | 31 | 39 | 36 |
| Asset utilisation | Asset Turnover Ratio | Times | 0.9 | 0.8 | 1.0 |
| Productivity | Ebit per Employee | Rs. mn | 3.3 | 1.2 | 1.1 |
* Excluding Real Estate
Operations
The key milestones during the year were achieving full connectivity of the 10 MW Nirmalapura wind power plant, obtaining clearance to commence construction of the 4.5 MW Mawanana hydropower project, and venturing into analytical and scientific testing equipment business with Japanese collaboration.
We also faced challenges, particularly on maintaining ex-stock margins in a price competitive market, training and education of end users of high-tech equipment and the consolidation and mergers of suppliers. Going forward, we plan to expand our ex-stock product portfolio, add more capacity to our hydropower portfolio by completing the projects in the development pipeline, strengthen new ventures such as HVAC, fire systems and analytical and scientific testing equipment business.
Strategies in Action
A highlight of the year was the connecting 7x1.5 MW power generating from wind farm on Sri Lanka’s North-Western coast, to Norochchole. Hayleys and consortium partner Windforce (Pvt) Ltd. were instrumental in providing capital and technical support in this successful venture. Mini hydropower plants currently under the Hayleys portfolio provide 5.1 MW capacity addition to the national grid. Another 7.5 MW are under consideration.
Outlook
New businesses that the sector embarked on such as analytical and scientific testing equipment, building management systems are expected to perform well in coming years with the anticipated economic growth in Sri Lanka. However, challenges are foreseen arising from mergers and demergers of suppliers and principals, as well those arising from suppliers moving towards working direct instead of going through an agent. Further, raw material and energy cost increases would have an impact on product margins.
