Sunshine Holdings’ 3Q highlights strategic expansions into consumer and healthcare

Diversified conglomerate Sunshine Holdings reported resilient growth in top and bottom line performances during the first nine months of the current financial year (9MFY21), with strong contributions kicking in from healthcare, agribusiness and consumer sectors. 

During this period, the group posted a consolidated revenue of Rs.17.4 billion, up by 10 percent year-on-year (YoY); group profit after tax (PAT) saw an increase of 11 percent YoY compared to last year, amounting to Rs.1.9 billion.

The group announced the merger of its healthcare business consisting of Sunshine Healthcare Lanka and Healthguard Pharmacy with the healthcare arm of Akbar Brothers, which consists of Akbar Pharmaceuticals, Lina Manufacturing and Lina Spiro. 

The strategic merger, which was finalised last month, created Sri Lanka’s first fully-integrated healthcare company, starting from manufacturing up to retailing of healthcare products, including last-mile distribution across the country for all healthcare products. 

Sunshine Healthcare now operates in all five segments of the healthcare supply chain, namely research and development (R&D), manufacturing, importation, distribution and retail. 

Furthermore, the group’s consumer sector acquired 100 percent shareholding of Daintee Limited in September 2020, to further expand its presence beyond tea, in the local consumer goods sector. Daintee is a market leader in the sweets and toffee category in Sri Lanka, with 40 percent market share.

The group revenue, which predominantly includes from healthcare, consumer goods and agribusiness sectors, contributed 52.2 percent, 28.4 percent and 17.1 percent, respectively. 

The healthcare sector recorded a YoY growth of 11 percent against last year, while the agri sector revenue was up by 14.8 percent. The consumer goods sector recorded a 17.3 percent increase in revenue, mainly due to the addition of Daintee Limited’s performance in the last four months.

The gross profit margin for 9MFY21 stood at 33.3 percent, an increase of 247 basis points against last year. The gross profit improved by Rs.918 million, up 18.8 percent YoY compared to the previous year, mainly backed by the contribution from the healthcare and agribusiness sectors. 

The group earnings before interest and taxes (EBIT) closed at Rs.2,906 million, an increase of 13.7 percent YoY. The group’s healthcare sector recorded revenue of Rs.9.1 billion for the period 9MFY21, an increase of 11 percent YoY over last year, due to strong performances in pharmaceutical and medical devices divisions. As a result, the EBIT for the sector increased by 32.5 percent, due to better cost control. 

The consumer goods sector reported a 17.3 percent YoY increase in revenue to close at Rs.4.9 billion, mainly due to the addition of the confectionary sub-sector. 

The PAT of the sector marginally increased by 3.3 percent YoY in comparison to the same period last year. 
The agribusiness sector revenue increased by 14.8 percent during 9MFY21 compared to same period last year. The gross profit increased to Rs.1,586 million, from Rs.1,133 million, due to the improved performance in both palm oil and dairy segments. The PAT of the agri sector grew 62.2 percent YoY compared to the same period last year. 

The energy sector revenue increased to Rs.348 million, from Rs.255 million, due to higher rainfall in the catchment areas during 9MFY21. This has resulted in a PAT growth of over three times compared to what was reported last year. 

Meanwhile, Sunshine Holdings yesterday announced a share split in the proportion of 1:3, which applies to its voting shares. The group also announced a cash dividend of Rs.1.00 per share to be paid on March 9, 2021.