Sunshine Holdings profit tops Rs. 1 b mark in FY13

Sunshine Holdings PLC yesterday announced another year of earnings and profitability growth for the year ending 31 March 2013.

The Company has delivered broad-based growth, increase in operational efficiencies and market expansion, in an environment that continues to be challenging.

“We ended the year with a strong quarter despite the mixed economic environment,” said Sunshine Holdings PLC Group Managing Director Vish Govindasamy. “The outlook for Healthcare, Agri Business and FMCG remains challenging, but at the same time we see growth and we have great momentum going into 2013/14.”

“Our core businesses continue to be a dominant force in respective industry and we will strive for further market expansion.”

For Q4 ending 31 March 2013, Group revenue was Rs. 3.6 billion, a Y-on-Y revenue growth of 10%. EBIT was Rs. 389 million while PAT was Rs. 298 million.

For the FY 2012/13, revenues were Rs. 13.1 billion, up 20% Y-o-Y, while EBIT grew 59% Y-o-Y to post Rs. 1.7 billion. PAT for the fiscal year was Rs. 1.25 billion, a significant jump from 2011/12 PAT of Rs. 565 million.

Healthcare, one of the largest contributors to the Group, posted revenue of Rs. 5.3 billion, a 14% growth Y-o-Y. Despite the increase in revenue, there was a 15% decline in PAT to Rs. 366 million Y-o-Y, underlying the challenging operating environment.

SBL, the company’s fully-owned healthcare subsidiary, is present in five categories –Pharmaceuticals, Surgicals, Diagnostics, Wellness/OTC and Retail.

The pharmaceutical category continues to be the largest contributor, had a robust 15% growth, while Diagnostics saw 12% growth. Largest growth came from the Wellness category, which has been boosted by new products launched during the fiscal year. In the Retail category, the Healthguard Pharmacy chain with over 20 stores has shown increased customer footfall in their new stores, which supported the 13% growth for the year under review.

The Group’s Agri Business, the largest revenue contributor to the Group in 2012/13, continues the momentum from the previous quarter, registering another good earnings, paying rich dividends to the Company’s multi-crop diversification strategy undertaken a few years back.

Posting a revenue of Rs. 5.4 billion for the year, a 27% growth Y-o-Y and PAT of Rs. 727 million, a 62% growth Y-o-Y, the diversified Agri Business is a consistent top-line contributor to the group.

Palm oil has clearly established itself as the corner stone of the Agri Business, while tea is having a turn-around year, driven largely by quality improvements in the field, resulting in increased production, aided by favourable market conditions.

Palm oil production increased 14% to 7.5 mkgs, being the largest producer of CPO in the country.

The tea segment recorded a Rs. 66 million profit, a far cry from the Rs. 501 million loss in the previous year.

Own production of tea increased 9% to 6.36 mkgs while bought leaf operation held its volumes against previous years at around 3.5 mkgs.

There was a decrease in turnover in the Rubber segment, contributed by a 185% drop in production and a Rs. 76 drop in NSA.

The FMCG segment crossed the Rs. 2 billion revenue mark for the first time in its history, posting an increase of 14% Y-o-Y to post Rs. 2 billion (against Rs. 1.8 billion for 2011/12). Despite crossing a major revenue milestone, PAT decreased 6% to Rs. 198 million against same period last year (Y-o-Y), mainly due to a rise in raw materials.

The tea category was again the largest contributor with revenue and volume growth in both Watawala (popular brand) and Zesta (premium brand), while Oliate (Edible Oil segment) came under some pressure, which impacted its profitability growth.

Overall, a 15% volume growth was recorded in the Tea, Edible Oil and Packaged Water segment in volumes, a tremendous achievement given the high cost raw material environment, which prevailed last fiscal year.

The Energy segment recorded revenue of Rs. 100 m for FY 2012/13, while posting a negative PAT of Rs. 6 million. FY 2012/13 was its full year of production for its energy subsidiary.