Hemas records 12 per cent growth

Hemas Holdings recorded a Turnover of Rs. 3.57 Billion for the quarter ended September 2007 reflecting a year on year growth of 12 per cent. This quarter was a challenging one for your company, which had to face the adverse effects of reduced consumer spending and depressed margins, whilst investing for future growth.

Higher input costs, increased costs of distribution and sustained high interest rate scenario, impacted operating margins for the quarter, which declined to 9 per cent from 14 per cent during the same period last year, Director and Chief Executive Officer Husein Esufally said.

Operating profit closed at Rs. 322 Million for the quarter, down by 27per centcompared to the corresponding period last year. Although tax efficiency improved, an increase in finance cost by 49 per cent resulted in Profit after tax declining from Rs. 310 Million to Rs. 176 Million for the second quarter of the year.

For the quarter under review FMCG sector recorded a turnover of Rs. 1.04 Billion, which reflects a marginal decline with the corresponding quarter last year.

Profits for the quarter declined to Rs. 100 million compared to Rs. 132Millin in the same period last year. This is attributed to the increase in a few key ingredients as well as general cost increases, which could not be passed on.

Price adjustments have now been made in line with the market, and margins in the subsequent quarter are expected to improve.

Healthcare sector Turnover for the quarter under review grew by 9 per cent to Rs 774 Million. Here too high distribution and finance costs impacted profits that declined 16 per centto Rs. 33 Million.

Construction of the 100 bed hospital in Wattala is also on schedule with commencement of operations planned for August 2008.

The performance of the Leisure sector was adversely impacted by the closure of Hotel Serendib, Bentota during the summer season. As a result, Profit for the quarter amounted to Rs. 14 Million compared to Rs. 29 Million in the corresponding quarter last year.

Transportation sector Turnover for the quarter grew by 23 per cent to Rs 154Mn. The GSA’s for Emirates and Malaysian Airlines performed satisfactorily with a significant increase in passenger sales. Profits, however, recorded a decrease of 7 per cent for the quarter to Rs. 30 Million; mainly as a result of the Freight business not performing up to expected levels.

In the Power sector, Turnover of Heladhanavi increased by 32 per cent to Rs. 1.3 Billion while construction of our mini-hydro project at Giddawa progressed according to schedule. The profit for the quarter decreased 37 per cent to Rs. 44 Million as a result of scheduled maintenance during this quarter. Despite this, half yearly profits grew by 8 per cent to Rs 149 Million.