Haycarb Ltd., Sri Lanka's pioneer activated carbon manufacturer, has seen a sharp downturn in profitability during the first quarter of the current financial year with the profit attributable to shareholders at Rs. 23.5, million down from Rs. 49.3 million a year earlier.

The company which earned a profit of Rs. 157 million for the financial year ended March 31, 1998, is however confident of improving on the first quarter results by the year-end. But it remains unclear whether last year's results can be matched.

Haycarb Chairman Sunil Mendis said that the very sharp depreciation of the currencies of competing producers in Thailand, Indonesia and Malaysia had exerted heavy pressure on Haycarb margins. Additionally, they had to contend with very high prices of coconut shell charcoal, the main raw material input, now running at Rs. 11,000/mt.

Haycarb which has a joint venture, Carbokarn, in Thailand has been somewhat cushioned against the negative external factors that has depressed performance in Sri Lanka with the Thai operation making good part of the lag. Further benefits are expected with the commissioning of a fourth kiln in the Thai factory this year.

According to unaudited first quarter results now with shareholders, group turnover was down to Rs. 298.7 million from Rs. 331.2 million a year earlier. The operating profit after interest was Rs. 36 million against Rs. 55 million in the first quarter of the previous financial year.

The post-tax profit of Rs. 33.1 million compared with Rs. 51.8 million earned a year earlier and the bottom line for the quarter under review, after discounting minority interest, was Rs. 23.5 million against Rs. 49.3 million a year earlier.