Sunshine Holdings records solid gains in 1Q despite challenges

Diversified conglomerate Sunshine Holdings PLC continued to demonstrate resilience amidst prevailing macro-economic conditions, reporting an impressive topline and bottom line growth for the quarter ended June 30, 2022 (1Q23).

The group, which has interests in healthcare, consumer goods and agribusiness rerecorded earnings of Rs.2.12 per share or Rs.1.04 billion compared to earnings of Rs.1.15 per share or Rs.564.3 million in the corresponding period of the previous year, on revenue of Rs.11.7 billion, up 59 percent. 

The revenue increase was mainly due to significant revenue growth in healthcare and agribusiness sectors together with the acquisition of a tea export business to strengthen its consumer sector.

The group’s healthcare sector emerged as the largest contributor to Sunshine’s topline, accounting for 50 percent of total revenue, with consumer at 33 percent, and agribusiness 16 percent of the total revenue.

During the period under review, the group’s Healthcare sector posted revenue of Rs.5.8 billion, a significant increase of 46 percent year-on-year (YoY) backed by the price increases to reflect the depreciation of the rupee, despite volume contraction. The group’s Healthcare sector EBIT for the sector was Rs.743 million. 

The consumer goods sector reported 109 percent YoY increase in revenue to close at Rs. 3.9 billion in 1Q23. 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. 

Excluding the new addition, revenue growth stood at 8 percent. Gross margins were impacted by the rising cost of raw materials, but EBIT margin has improved by 404 bps compared to the same period last year.

The agribusiness sector of the Group, represented by Watawala Plantations PLC (WATA), saw a revenue increase of 32 percent during the first quarter compared to the same period last year. 

PAT of the Agri sector closed at Rs.734 million for 1Q23, up by Rs. 10 million compared to the same period last year. However, EBIT decreased by Rs.27 million (3 percent contraction YoY) owing to increased cost of bought crop and reduction in crop volumes - a result of fertilizer unavailability for the last two years.