Gloom in tea business clouds Sunshine Holdings performance in March

Sunshine Holdings PLC reported modest growth in revenue while the operating profits slipped as the group’s upcountry tea plantation business, which the group divested earlier this week for little over one billion rupees, weighed on the performance during the quarter ended March 31, (4Q19).

The diversified conglomerate whose bulk of the revenues are generated by healthcare and consumer businesses, reported a consolidated revenue of Rs.22.6 billion for the quarter under review, up 7 percent year-on-year (YoY).

Sunshine Holdings, the owners and operators of the Healthguard pharmacy chain, reported an operating profit of Rs.2.22 billion, down 14 percent YoY. 

Healthguard, which was known mainly as a pharmacy retailer network, has now broadened its range to add more beauty and wellness products to its portfolio to woe more customers. 
The group reported earnings of Rs.4.43 a share or Rs.646.9 million for the three months under review compared to Rs.6.08 a share or Rs.829.4 million reported for the same period last year. 

As a part of a strategic re-alignment, Sunshine Holdings in 2017 spun off its upcountry tea business into a separate entity, Hatton Plantations PLC, which until then was held under its subsidiary, Watawala Plantations PLC.

Sunshine Holdings sold majority stake or 51 percent of Hatton Plantations PLC this week to Lotus Renewable Energy Group for Rs.8.30 a share. 

“The divestiture is in line with the group’s strategy of taking a significant step in refocusing the footprint in healthcare and consumer segments for strategic specialization,” Sunshine Holdings Group Managing Director Vish Govindasamy, said.

Meanwhile, for the year ended March 31, 2019 (FY19), the group reported a loss of Rs.74.5 million compared to a profit of Rs.115.5 million reported for FY18. The revenue was up 6 percent YoY to Rs.5.9 billion. 

“During the year in review, we have continued to display a resilient and entrepreneurial spirit in the face of such difficulties as a group. Though our agribusiness revenue has contracted slightly, both healthcare and consumer goods have contributed immensely towards the group revenue, continuing their strong growth momentum from last year,” Govindasamy said. 
Besides these three business verticals, Sunshine has interests in to hydropower generation, roof-top solar systems, palm oil and dairy.

By end-March 2019, Lamurep Investments Limited held 45.41 percent stake in Sunshine Holdings followed by SBI Ven Holdings Pte Limited and Deepcar Limited, which held 18.08 percent and 17.43 percent stakes respectively.