Hemas net profit up 59.2% to Rs. 899 m

Friday, 18 February 2011 04:25 -     - {{hitsCtrl.values.hits}}

Hemas Holdings Plc has posted net earnings of Rs. 899.1 million in the first nine months of 2010/11 financial year, up by 59.2% over the corresponding period of last year, whilst Group turnover rose by 18.2% to Rs. 13.4 billion.

For the quarter ended 31 December 2010, the Group has recorded a turnover of Rs 4.7 b, a year-on-year increase of 18.6% and earnings of Rs 311.4 m, a growth of 25.9%.  “During the year, the Group’s performance was bolstered by the growth in Power, Healthcare and Transportation sectors, together with the recovery in the Leisure sector,” Hemas Holdings CEO Husein Esufally said.

FMCG sector posted revenue of Rs 4.4 b for the nine months ended 31 December 2010, a growth of 10.0% over last year. However, the impact on margins due to increased raw material prices and CESS on imports has caused the sector profits to decline 7.8% from last year, to close at Rs. 436.5 m for the nine months.

“During the year, our sanitary napkins brand Fems and snack foods brand Mr Pop were re-launched, and the market response has been quite satisfactory,” The CEO said.

Healthcare sector revenues and profits were boosted by the high growth in the pharmaceuticals business where both the top-line and the bottom line grew 26% year-on-year. Esufally said the business did well to maintain share in a strong growth market.

“During the quarter under review, we signed up with Mankind which specialises in acute and chronic therapies,” he added.

The steady build-up of the hospitals business continued with a revenue growth of 77%, which has enabled the business to achieve positive EBIT within two years of commencement of operations. “Hemas opened its new laboratory in Ragama during the year and it has delivered results beyond our expectations,” he added.

Leisure sector revenues grew 47% year-on-year, to close the nine months at Rs. 879 m, on the back of the tourism recovery in post-war Sri Lanka. Tourist arrivals to Sri Lanka totalled 654,476 in 2010, a growth of 46.1% over 2009.

“All our hotels are currently operating at high occupancies and are enjoying higher room rates. Sector profits for the nine months ended 31 December 2010 closed at Rs. 1.3 m compared to a loss of Rs. 25.5 m a year ago,” Esufally said.

Hemas’ transportation sector enjoyed a revenue growth of 12.2% and a profit growth of 62.8%, to report a turnover of Rs. 557 m and profits of Rs. 197 m for the nine months under review. There has been a significant increase in passenger and cargo volumes in aviation services businesses, and enhanced transhipment volumes in the maritime segment and growth in the freight business, resulting in all areas contributing well.

The power sector recorded revenues of Rs. 2.4 b for the period under review, up 14.7% from last year, and profits of Rs. 235 m, which represents a growth of 115.9%. Hemas thermal power plant Heladhanavi generated 482.4Mn KWH of energy while mini hydro plants generated 16.0Mn KWH, reflecting plant factors of 73% and 53% respectively.

“The power generation at both our mini hydro plants was at highest levels as both catchments received healthy rainfalls. It is important to note that nearly 45% of our net profits are now derived from the hydro sector. Work relating to our new 2.4MW project at Magal Ganga is progressing satisfactorily and we are confident of keeping the project cost and timelines within initial budgets,” the CEO said.

“Despite the short-term impact on the supply and demand of our consumer businesses caused by the widespread rains and flood, we look forward to closing the financial year with a healthy growth in performance,” Esufally added.