Wednesday, June 29, 2022
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Hemas financial performance reflects resilience despite challenges

Hemas Holdings PLC (HHL) said it delivered a strong and resilient first nine months amidst a challenging operating environment with Group revenue up 20.5% to Rs. 57.7 billion and underlying cumulative operating profit (excluding all disposed entities) up 4.3% to Rs. 4.9 billion.

Hemas noted the latter was in spite of profitability pressure experienced across most parts of the business due to input cost inflation and challenges around foreign exchange liquidity. 

Underlying Group earnings excluding dividend tax stood at Rs. 3.3 billion, up 7.2% from a year earlier.

 Pre-tax profit from continuing operations rose by 14.4% to Rs. 5 billion and after tax profit was up 45% to Rs. 2.4 billion. Bottom line was up 33% to Rs. 3.18 billion.

During the third quarter, Hemas Group revenue grew by 21.9% to Rs. 21.5 billion over last year. The Group underlying operating profit and earnings of Rs. 2.3 billion and Rs. 1.3 billion saw a year-on-year increase of 5.7% and 2.4% respectively. 

The Group’s Healthcare businesses, in particular, contributed to the improved performance. In 3Q Hemas divested its interest in Spectra Logistics for Rs. 1.3 billion and the gain realised in the sale amounted to Rs. 295.3 million.

Hemas Holdings Group CEO Kasturi C. Wilson said against a challenging operating environment, she was encouraged by the progress made in the first nine months into the year.

“In the near-term, the operating environment will continue to remain challenging. In this scenario, we will manage our business with agility, and continue to grow our footprint whilst maintaining our focus in managing margins,” she said. “

The company remains confident of the medium to long term potential of the Consumer and Healthcare sector in Sri Lanka and Hemas’ ability to deliver a consistent growth.

 Further,it  continues to invest in uplifting digital capability within the organisation. Further, we strengthened the focus in continuing to expand our footprint beyond Sri Lanka, as we drive our internationalisation strategy,” the Hemas Group CEO added. 

The Consumer Brands sector recorded cumulative revenue of Rs. 22.5 billion, a growth of 17.0% over last year. However, sector cumulative earnings of Rs. 1.6 billion witnessed a year-on-year decline of 14.8% due to profitability pressure. 

During the quarter, the Consumer Brands sector registered a revenue of Rs. 9.7 billion, an increase of 22.2% compared with the corresponding quarter in FY 2021. 

 HPC Bangladesh witnessed double digit cumulative revenue and profitability growth due to improved market conditions in the first two months. 

Atlas Axillia continued to gain market share across all key categories including books, school and colour products over last year with double digit volume growth through premiumisation by way of design and technology. 

The  He;ath care Sector reported a cumulative revenue of Rs. 33.7 billion, a growth of 23.7% over last year whilst sector profit of Rs. 2.7 billion was a 21.2% growth over last year. 

The Sector posted a revenue of Rs. 11.5 billion whilst operating profit and earnings stood at Rs. 886.7 million and Rs. 651.5 million respectively for the quarter. 

The growth in profitability was primarily driven by the robust performance in Hospitals. However, profit margins continued to be impacted due to challenges around forex liquidity.

 Pharmaceutical businesses delivered a stable revenue growth year to date. Price controls on medicine coupled with scarcity in foreign exchange reserves have hampered medicine imports into the country. 

Hospitals witnessed an average increase in admission volumes by 10.6% over last year for the first nine months.

The third quarter of the year saw robust growth as the focus on non-COVID-19 patients was increased, especially Non Communicable Diseases (NCDs), which pose a substantial risk to the health of the people. Further, an outbreak of dengue was another contributor to the increased admissions during the quarter. 

Thalawathugoda and Wattala hospitals recorded an overall occupancy of 66.7% and 61.3% respectively for the quarter. 

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