Sunshine Holdings continues growth momentum

Monday, 8 November 2010 06:18 -     - {{hitsCtrl.values.hits}}

The results achieved by the Group in the period under review are highly commendable. The revenue of Rs. 4.9 billion earned in the half year represented a growth of 16.2% over that of Rs. 4.2 billion recorded in the same period in the previous year.

The profit attributable to the shareholders of Sunshine Holdings Plc, recorded a remarkable increase of 22.6% to reach Rs. 172.8 million. Group Profit before Tax (PBT) of Rs. 428.5 million increased by

Rs. 174.9 million from that reported in the same period in the previous year. Growth in earnings was driven by strong performance in the Health and Plantations sectors. The Profits Before Tax (PBT) in those two sectors increased by 37.1% and 219.5% respectively.

The Healthcare Sector reported an 18.5% increase in revenue over the same period last year to reach a figure of Rs. 2.039 billion. Our presence in all major sectors in Healthcare Products, namely, pharmaceuticals, surgical and medical devices, diagnostics and nutraceuticals, enabled us to hold our overall market share with the aggressive introduction of new products in all segments. We foresee growth in the sales of these new products. The Profit After Tax (PAT) of Rs. 155.9 million, represented a significant growth of 37.6% over that recorded in the previous year. This result was achieved through improvement in gross margins, tight cost controls and effective management of working capital.

The Plantation Sector recorded a 14.2% increase in revenue over the corresponding period in the previous year, to reach a figure of Rs. 2.764 billion. This increase in revenue is attributable to the 14% increase in Tea production, which amounted to 4.6 million kilogrammes. The Net Sales Average (NSA) reflected an increase of Rs. 26 per kilogramme. PAT for the year increased significantly by 245% to register a figure of Rs. 156.9 million. This result contributed to both top line and bottom line growth. We foresee further improvements during the latter part of the year.

The turnover of Rs. 112 million recorded in this sector, which represented a 94.3% increase over that achieved in the corresponding period in the previous year, is an encouraging sign, because it signals a welcome return to profitability. The return to profitability was attributable not only to the growth in Turnover but also to lower finance costs. We foresee recovery in the business of our main customer (tea exporters) as the trading environment continues to improve. The improvement in their business prospects bodes well for the future of this Sector. With timely investment in equipment that has served to reduce energy costs and increase throughput, we should be able to improve the returns in the quarters ahead.

The revenue earned by the Tourism Sector in the period under review was disappointing. Yet, we are hopeful that this sector will forge ahead to greater success with the rapid increase in tourist arrivals. The company is aggressively pursuing its strategy of expanding its estate bungalow operations to take advantage of the demand for eco-friendly tourism. The Company has already undertaken work to refurbish 3 tea estate bungalows in the hill country.

Our Hydro Power subsidiary, Sunshine Power has signed the first PPA agreement with the CEB for its Lower Waltrim project.

The Group is confident of sustaining the impetus towards increase in business volumes and profitability across all key sectors that are within its purview and control. The Plantation and Health sectors in particular are expected to achieve significantly higher levels of growth in business volumes and earnings during the next 6 months.