26 May 2021 - {{hitsCtrl.values.hits}}
Hemas Holdings PLC reported robust revenues and profits for the three months to March 2021 (4Q21), as the company’s performance mirrored a fast rebounding economy aided by a surging consumer spending spell.
The consumer retailing juggernaut with interests in healthcare and logistics reported revenues of Rs.16.6 billion for the quarter under review, up 18.3 percent year-on-year (YoY), as demand increased for its home and personal care range, schools reopened creating demand for its stationary business, healthcare sector continued to perform well while its logistics operations strengthened with recovering cross-border trade.
The group’s consumer brands segment, which constitutes a wide range of home and personal care products and the stationary segment via Atlas, generated revenues of Rs.5.8 billion during the quarter, up 41.5 percent from the same period last year on improved performance in both Sri Lanka and Bangladesh.
While the company relaunched its existing products and added new products to the existing range, it also commenced distributorship for global personal care brands such as Nivea, L’Oreal and Garnier.
But this segment began to feel the pinch on its margins, coming from the rising commodities prices due to inflation, which is emerging and the weakening of the rupee, Hemas said.
“The consumer brands business’ profitability margin for the quarter contracted as a result of steep exchange rate depreciation and rising inflation coupled with the increase in commodity prices,” Hemas said, adding that “inflation and currency devaluation are expected to add pressure on the group’s profitability”.
The group reported operating profits of Rs.1.32 billion for the quarter, up 58.8 percent YoY, as it shed its interests in non-core businesses, the most recent being the exit from the leisure sector operations after the disposal of Serendib Hotels PLC in December 2020, to focus on core businesses, which essentially provides the group with the defensive cash flows it needs.
Meanwhile, the group’s healthcare segment comprising of pharmaceutical manufacturing, distribution and hospitals, generated the most revenue for the group of Rs.10.0 billion during the quarter, up 12.4 percent YoY.
“Pharmaceutical manufacturing business, Morison and pharmaceutical distribution business delivered a healthy financial performance during the quarter leading to a cumulative double-digit year-on-year earnings growth of 40.6 percent,” Hemas said.
Meanwhile, its hospitals witnessed positive quarter-on-quarter momentum in patient footfall, which increased its overall average occupancy to 47 percent during the second half of the year. The hospitals generated additional revenue from mobile lab service, home care services and Kaya intermediary care centre, the company added.
Meanwhile, the group’s logistics business generated revenues of Rs.734.1 million for the quarter, up 27.1 percent YoY on improved trade activity.
Hemas reported earnings of Rs.1.44 a share or Rs.859.8 million for the quarter under review, compared to earnings of 80 cents a share or Rs.479.8 million in the same period in 2020.
For the full year ended March 2021, the group reported earnings of Rs.5.46 a share or Rs.3.25 billion, compared to earnings Rs.2.07 a share or Rs.1.24 billion. The group generated full year revenue of Rs.64.5 billion, up 7.4 percent YoY.
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