Hemas ends FY24 with record earnings

Consumer goods company Hemas Holdings PLC saw its earnings for the quarter ended 31 March (4Q24) expand 48.8 percent Year-on-Year (YoY) reaching Rs. 1.57 billion, despite a decline in revenue.
Hemas Holdings revenue contracted marginally by 2.4 percent YoY toalling Rs. 31 billion. Contributing to the revenue drop was the other segment, which contracted by 76 percent YoY, and Consumer Brands which dropped by 15.8 percent.

Hemas attributed the decline in revenue for the quarter to the change in seasonality of the Learning Segment, resulting in a timing difference in the Consumer Sector.  Despite the decline in revenue, the entity pointed out that the positive impact of efficiency improvement initiatives resulted in operating profit to increase by 4.3 percent while earnings too improved.
For the financial year ended 31 March 2024, Hemas Holdings delivered robust results where it reported a cumulative revenue of Rs. 121.6 billion. This is a 6.7 percent increase over last year.  In a commentary included in the release of the interim results, Hemas said the improvement was driven by strong performance of the core businesses and reduced finance costs. The earnings demonstrated a significant 43.1 percent growth, reaching Rs. 6.1 billion, the highest ever earnings reported by the Group in a single year.

For the consumer brands segments, the shifts witnessed in consumer buying patterns in the value-for-money segments continue to prevail amidst contracted purchasing power of consumers.  The cumulative revenue for the sector posted a growth of 6.6 percent to reach Rs. 50.7 billion while the operating profit of Rs. 7.6 billion reported a growth of 28.9 percent. 
Despite the modest growth in revenue, multiple efficiency improvement initiatives and productivity enhancement measures coupled with supply chain efficiencies resulted in margin improvements for the businesses, Hemas Holdings said.

Over 50 percent reduction in finance cost, lower working capital base and reduced cost of borrowing coupled with improved operating profit resulted in the earnings growing by 56.2 percent reaching Rs. 5.1 billion for the year. The healthcare sector reported a revenue of Rs. 69.1 billion, a growth of 6.9 percent while the operating profit for the period witnessed a decline of 7.6 percent against last year due to increase in overheads, inventory provisions and one-off stock adjustments attributable to price revisions for regulated medicines. Despite the contraction in operating profit, the earnings for the year of Rs. 2.3 billion, posted a growth of 12.3 percent due to reduction in finance costs and lower taxes. 
The mobility sector witnessed a cumulative revenue growth of 3.9 percent to reach Rs. 1.7 billion. However, operating profit and earnings reported an approximate degrowth of 20 percent mainly due to the appreciation of the LKR.

 “The Group maintains a cautiously optimistic stance regarding the macroeconomic outlook and recognises the critical importance of successful restructuring of debt and adhering to the IMF programme to achieve macroeconomic stability,” said Hemas Holdings Acting Chief Executive Officer Ravi Jayasekera. 
“The country has witnessed several leading indicators suggesting a potential economic upturn, notably with an increase in demand. The Group is well-positioned to leverage such shifts by implementing consumer and patient centric approaches,” he added.