Sunshine Holdings delivers robust first half amid macroeconomic challenges

Recording another quarter of sound financial performance in a challenging economic backdrop, diversified conglomerate Sunshine Holdings posted consolidated revenue of Rs. 24.9 billion for the six months ending 30 September 2022 (1HFY23), an increase of 57.7 YoY compared to the corresponding period of last year.

Profit after tax (PAT) for the period in review rose to Rs. 3.2 billion, an increase of 28.2 percent YoY, on the back of the profit arising from the improved performance in Healthcare, Consumer Goods and Agribusiness. 

The gross profit improved by Rs. 1.9 billion, up 36.3 percent YoY compared to the previous year, in line with the Group’s revenue growth. Gross profit margin for the period in review stood at 29.4 percent, which is a contraction of 463 basis points against the same period last year. Profits attributable to equity shareholders (PATMI) closed at Rs. 1.9 billion for 1HFY23, an increase of 60.0 percent YoY. 

The Group’s Healthcare business emerged as the largest contributor to Sunshine’s top-line performance, accounting for 46.6 percent of total revenue. In comparison, Consumer and Agribusiness sectors of the Group contributed 34.4 percent and 18.4 percent respectively of the total revenue. 

In April 2022, Sunshine Tea (Pvt) Ltd, which is a tea export business, was acquired by the Group and its performance is consolidated under Consumer Goods sector with effect from 1st April 2022.

The Group’s Healthcare segment generated Rs. 11.6 billion in turnover during 1HFY23, representing a significant growth of 35.9 percent YoY on the back of improved performance in Pharmaceutical and Medical Devices segments. 

Lina, the Pharma manufacturing business, experienced revenue growth mainly due to price revisions together with the revenue earned from Metered Dose Inhaler (MDI) sales to the government. The first MDI sale was made in the month of July 2022 marking the commencement of commercial operations in Lina Spiro. The Healthcare sector PAT increased by 51.7 percent YoY.

Recording a 128.4 percent increase in revenue compared to the corresponding period of last year, the Consumer Goods Sector recorded revenue close to Rs. 8.6 billion. Export business accounts for46.9 percent of the sector’s revenue. Excluding the new addition of Sunshine Tea, revenue growth stood at 21.3 percent. The PAT of the sector increased by Rs. 383 million compared to the same period last year. 

The Group’s agribusiness sector, represented by Watawala Plantations PLC (WATA) and Watawala Dairy Limited (WDL), saw a revenue increase of 34.4 percent YoY to Rs. 4.6 billion. The EBIT margin contracted due to reduction in crop volumes YoY and increased cost of bought crop. PAT of the Agri sector closed at Rs. 1.9 billion for 1HFY23, up by Rs. 45 million compared to the same period last year. 

Sunshine Holdings PLC is a diversified conglomerate contributing to ‘nation-building’ by creating value in vital sectors of the Sri Lankan economy – healthcare, consumer goods
and agribusiness.

 Established in 1967, the group is now home to leading Sri Lankan brands such as Zesta Tea, Watawala Tea, Ran Kahata, Daintee Confectionary and Healthguard Pharmacy, with over 2,300 employees and revenue of Rs. 32 billion in FY22. The business units comprise of Sunshine Healthcare Lanka, Sunshine Consumer Lanka and Watawala Plantations PLC.