Hemas Holdings PLC (HHL) and its subsidiaries achieved consolidated revenue of Rs.23.0 billion, a year-on-year (YoY) growth of 11.6% and profit attributable to equity holders of Rs.1.4 billion, a decline of 8.0% for the six months ending September 30, 2017.
Year to date operating profit reached Rs.1.96 billion, a YoY decline of 5.4%. Despite consolidated revenue growing aided by higher turnover from the healthcare and mobility sectors, group earnings indicate a decline due to our Bangladesh personal care business, pharmaceutical distribution, leisure and travel all facing margin challenges, said Hemas Chief Executive Officer Steven Enderby. The home and personal care sector revenue of Rs.8.1 billion for the first six months ending September 30, 2017, indicates a decline of 2.6% over the previous financial year. Operating profits were Rs.968.7 million, 16.4% YoY decline. Despite the challenging domestic macro environment, Hemas’ Sri Lanka business reported steady growth in key personal care categories with market shares being maintained across most major categories. The decline in operational performance has been impacted by the Group’s Bangladesh operations where bad weather conditions during Q1, the restructuring of its sales and distribution network, increased competition and the expansion of its portfolio resulted in lower margins.
During the six months under review, Hemas’ consolidated healthcare sector registered revenue of Rs.10.6 billion, a YoY increase of 16.5% whilst operating profit and PAT grew at 8.0% and 18.0%.
The Group’s healthcare sector was the main contributor to Group growth year to date. In order to drive future growth, Hemas Pharmaceuticals ventured into regional markets for the first time with its entry into Myanmar during Q2. The renamed and rebranded J.L. Morison Son & Jones (Ceylon) PLC (JLM) to Morison PLC posted a revenue of Rs.1.9 billion and operating profit Rs.282.7 million for this interim period.
The Group’s Leisure, Travel and Aviation business recorded a total revenue of Rs.1.6 billion, reflecting a decline of 14.7% YoY for the six months under consideration. Serendib Hotels reported a 5.6% fall in revenue due to decline in occupancies and average room rates primarily due to increase in room inventory. During the second quarter, Serendib Group announced the acquisition of a 51.15% stake of the ‘Lantern’ Group for an investment of Rs.309.5 million. Travel and Aviation segment indicated a growth in revenue of 1.3%. Overall profitability of this segment continued to be below expectations stemming from travels and hotels. Hemas Logistics and Maritime recorded revenue growth of 54.0% over last year with revenues of Rs.1.3 billion. This growth has been driven by both the Group’s agencies and logistics.
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