Hemas Holdings PLC, which has interests in FMCG, healthcare and transportation, saw its March quarter (4Q16) net profit edging down 3.5 percent year-on-year (yoy) to Rs.744.2 million, the interim financial accounts released to the Colombo bourse showed. The earnings per share (EPS) accordingly declined to Rs.1.30 from Rs.1.50.
Hemas share closed flat at Rs.91.30 during yesterday’s trading. The slight decline in profits however came in the backdrop of an improved top line amid higher revenue and lower costs. The revenue rose 9.4 percent yoy to Rs.9.69 billion while cost of sales fell 0.4 percent yoy to Rs.5.95 billion, resulting in a gross profit of Rs.3.74 billion, up 29.7 percent.
However, the operating profit for the quarter edged up only by 1.6 percent to Rs.1.17 billion as a result of higher administrative income, which rose 55.5 percent yoy to Rs.1.8 billion. The finance income for the quarter rose 121.3 percent yoy to Rs.194.3 million, most likely stemming from the investments of rights issue proceeds. Hemas made a cash call from shareholders to the tune of Rs.4.1 billion in 2015 to carry out possible strategic acquisition/s.
However the company is yet to announce any such acquisition. Meanwhile, for the year ended March 31, 2016 (FY16), Hemas saw its net profit increasing 37.7 percent yoy to Rs.2.65 billion with an EPS of Rs.4.63, improving from Rs.3.74 reported for FY15.
The profits were supported by a stronger top line and higher finance income, which rose over 250 percent yoy to Rs.642.4 million. A quarterly segmental analysis showed the main two sectors FMCG, transportation and healthcare segments posting higher revenue and profits. Gross segmental revenue for the FMCG sector for the quarter was Rs.3.2 billion, up from RS.2.95 billion a year ago. The net profit of the segment also rose to Rs.385.5 million, up from Rs.255.9 million. Apart from a strong local presence, the company’s FMCG sector has a significant presence in Bangladesh and is looking to increase its presence in the South Asian region.
Hemas Group CEO Steven Enderby in a statement said Bangladesh operations maintained excellent profit and revenue growth during the period under review. The healthcare sector saw its revenue going up to Rs.4.27 billion from Rs.3.88 billion a year ago. The net profit of the segment also improved to Rs.344.5 million from Rs.289.4 million. Hemas owns J.L.Morrison, a listed pharmaceutical manufacturer and also operates two hospitals in the outskirts of Colombo. Despite reporting higher revenue, the leisure segment’s net profit slowed down to Rs.57.9 million from Rs.78.7 million a year ago. The segment’s operating profit however rose to Rs.262.7 million from Rs.243.7 million. Hemas has several listed hotel firms and also has a couple of joint venture projects with Thailand’s Minor International.
The transportation segment of the group reported a revenue of Rs.500 million for the quarter under review, up from Rs.40.38 million. The net profit rose to Rs.133.59 million, up from Rs.59.2 million, a year ago. “GSA businesses continued to experience challenges from lower yields of ticketing income,” Enderby said. Hemas was recently appointed as the sole agent for Everygreen Shipping, a development expected to boost the company’s transportation sector operations.
Other business interests, which include IT operations, reported a net loss of Rs.159.9 million against a Rs.91.5 million profit a year ago. Through several investment vehicles, the Esufally family controls over 60 percent of the issued shares of Hemas while noteworthy foreign institutional investors, such as Templeton Fund, feature among the top 20 shareholders of the company.