During the first six months of FY 2016/17, Hemas and its subsidiaries achieved consolidated revenue of Rs. 20.6 billion, up 12% year-on-year (YoY). Operating profit rose by 29% to Rs. 2.1 billion.
Hemas CEO Steven Enderby said overall the group has grown well despite lower than expected economic growth at 3.9%, unfavourable weather conditions, VAT uncertainty and increasing inflation resulting in weakened domestic consumer demand.
“We anticipate a challenging second half for our businesses with increased VAT rates, the introduction of VAT at hospitals, the runway refurbishment impacting travel and leisure and the recent price controls imposed on pharmaceuticals. As ever the team is ready and prepared to respond to these challenges,” the CEO added.
In the first half, Hemas’ consumer business recorded a topline of Rs. 8.4 billion for the first six months, a 13.1% YoY increase over the previous financial year. Its operating profits were Rs. 1.2 billion, 45.8% YoY growth, while earnings grew at 53.3% to stand at Rs. 942 million. Local consumer sector growth was driven by market share improvement in the personal care and personal wash portfolio.
Further, relatively benign commodity prices during the first half of the year contributed towards the sector gross margin improvement.
Bangladesh consumer sector growth was mainly driven by extended reach attained through Hemas’ own distribution channels and strong marketing activities. The company also introduced its latest product ‘Kumarika Facewash’ to the Bangladeshi market.
Consolidated healthcare sector revenue for the first six months stood at Rs. 9.2 billion, a YoY increase of 17.3% while earnings grew at 30.3% to Rs. 643 million. Hemas’ pharmaceutical distribution operation recorded a solid performance over the last year, including improved market share.
During the period under review, Hemas Hospital Wattala added a new wing with a dedicated surgical ward comprising 27 rooms in addition to an expanded dialysis centre.
Parallel to the new opening, Hemas launched an advanced Gastroenterology Centre and a range of new surgical specialties ranging from urology and ENT to Orthopaedics, in addition to the installation of its latest state-of-the-art 128 slice CT scanner.
J.L. Morison posted a YoY growth of 6.7% and earnings growth of 21.8% for the six months ended 30 September 2016. Hemas’ Rx Pharma portfolio continued to do well, benefiting from new product launches. With a view to increasing its focus on its healthcare portfolio, Hemas exited agricultural supply operations which have been part of J. L. Morison for many years.
The Leisure, Travel and Aviation (LTA) business recorded total revenue of Rs. 1.8 billion, reflecting an 8.4% YoY growth for the first six months. The Hotels sector recorded a revenue growth of 5.4% over last year, recording a topline of Rs.754 million.
Enderby said LTA experienced a decline in segmental profitability during the first six months, compounded by losses at Anantara Peace Haven Tangalle Resort, which is in its first full year of operations. The latest addition to Hemas’ leisure portfolio is Anantara Kalutara, opened in September in which it has a 12% shareholding. Hemas is continuing its efforts to enhance and develop the luxury travel market in Sri Lanka through its close relationship with the Minor Group.
The Travel and Aviation segment continued to show mixed results with some GSAs showing improvements in both yields and the number of passengers handled while others faced competitive operating environments. As a result, the segment recorded a decline in revenue of 1.5%.
Hemas maritime and logistics recorded growth of 93.3% over the last year, recording a topline of Rs. 841 million. This growth has been driven by its new maritime agency, Evergreen.
“The acquisition of this agency gives us a stronger position in the logistics and maritime space, an area which we are now planning to expand further,” the CEO added. - See more at: