Saturday 28 May 2016

Sri Lanka Hemas March net down, annual profit up 38-pct

ECONOMYNEXT – Sri Lanka’s Hemas Holdings March 2016 quarter net profit fell 3.5% to 744 million rupees from a year ago with sharp increases seen in administrative expenses and finance costs.

Hemas group sales went up 9.4% to 9.7 billion rupees in the period, interim results ffiled with the stock exchange showed.

Diluted earnings per share were 1.32 rupees for the quarter. In the year to 31 March 2016 EPS was 4.71 rupees with net profit up 38% to 2.7 billion rupees while sales grew 17% to almost 38 billion rupees.

Hemas Holdings Chief Executive Steven Enderby said the group earned an additional interest income of 280 million during the year from investing the proceeds of the rights issue.

“We continue to focus on driving growth from our core Consumer and Healthcare businesses while seeking continuous innovation, and strong profitability for the year ahead,” he said.

Hemas group FMCG sector total annual revenues grew 20% to 14.3 billion rupees from the year before with earnings up 37.2% to 1.4 billion rupees.

“The strong performance was underpinned by our Bangladesh operation maintaining excellent revenue and profit growth, as well as strong sales across all our major brands in the domestic market,” Enderby said.

Hemas also benefitted from relatively weak commodity prices for key raw material inputs.

Group healthcare sector revenue for the twelve months rose 16% to 16.1 billion rupees with earnings up 22.8%.

Enderby said Hemas unit JL Morison earnings grew 43.4% for the twelve months ended March 31, 2016.

“Revenue growth was largely driven by the increase in sales from the buyback arrangement with Government of Sri Lanka and sales growth in key diagnostics agencies,” he said.

“The significant growth in operating profit resulted from increases in revenues in both consumer/OTC products and pharmaceuticals segments, efficiency and capacity gains at the plant, after a period of closure of the plant in Q1 2014/15 and a restructured distribution network.”

Hemas group leisure business made a loss during the year although sales grew 13% to 3.4 billion rupees.

“Our newest property, the luxury hotel Anantara Peace Haven Tangalle Resort, opened in December, finished its first operating quarter with an encouraging performance,” Enderby said.

Serendib Hotels posted a revenue growth of 12.2%, driven by strong performance from the popular Dolphin Hotel which recorded year-round occupancy of 83%.

Transportation sector revenue grew 17% to 1.8 billion rupees.

This was driven by “higher volumes through domestic logistics operations with warehouses operating at high levels of capacity, higher volume throughput at our container depot and new 3PL customers, specifically Hemas Logistics which was able to secure a warehouse and distribution agreement for Sathosa,” Enderby said.

“With subdued revenue growth from the aviation segment, the transportation sector registered an operating profit of 500 million rupees, a growth of 10.7% over the previous year.”

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