Diversified Hemas Holdings PLC saw its net profit for the June quarter (1Q16) improving 68 percent year-on-year (yoy) to Rs.415 million, the interim financial accounts released to the Colombo Stock Exchange showed.
The earnings per share for the quarter improved 81 cents from 48 cents reported in the same quarter of the previous year (1Q15).
The revenue for the quarter under review rose 23 percent yoy to Rs.8.8 billion while cost of sales rose 21.4 percent yoy to Rs.5.6 billion. The gross profit stood at Rs.3.17 billion, up 26 percent yoy.
Despite administrative and selling and distribution costs increasing 16 percent and 32 percent, respectively, the operating profits rose 37 percent yoy to Rs.673 million.
The income tax paid for the period rose 116 percent yoy to Rs.230 million.
A segmental analysis showed that the revenue of the group’s main FMCG sector increasing 33.2 percent yoy to Rs.3.8 billion. The segment’s earnings stood at Rs.313.6 million, up from Rs.232 million in 1Q15.
“Revenue growth was led by our personal wash, personal care, feminine hygiene and home care brands, which experienced a growth in general trade as well as in modern trade channels.
Our efforts in building our own distribution network in Bangladesh helped double the top line growth in that market for the period under review,” Hemas Group CEO Steven Enderby said.
The healthcare segment which includes hospitals, pharmaceutical manufacturing and distribution posted a revenue of Rs.3.7 billion for 1Q16 up from Rs.3 billion in 1Q15. The earnings improved to Rs.212.1 million from Rs.135.6 million.
“Our growing diagnostic network made a notable contribution towards the segment results and both our hospitals at Wattala and Thalawathugoda achieved strong growth,” Enderby said.
The group’s pharmaceutical manufacturing subsidiary JL Morison achieved a top line growth of 57.3 percent and an earnings growth of 603.5 percent to Rs.902 million and Rs.73 million, respectively.
“Overall JL Morison has made good progress with record performance in our OTC brands Lacto Calamine, Morison’s Gripe Mixture and Valmelix and the recent signing of the Rx pharmaceutical buy back agreement with the Government of Sri Lanka positioning the company well,” Enderby said.
The leisure sector reported a revenue of Rs.529 million for 1Q16 up from Rs.515 million in 1Q15. However, the sector recorded a loss of Rs.9.1 million against Rs.5.4 million profit.
“The performance of the sector continued to be negatively impacted by the depreciation of the Euro contributing to the drop in average room rates (ADR),” Group CEO noted.
Hemas is currently constructing two Anantara properties at Peace Haven, Tangalle and Kalutara and they are scheduled to open in November 2015 and early 2016 respectively.
The transportation sector posted a topline growth of 19.4 percent to achieve Rs.399 million, while earnings declined by 15.5 percent to Rs.83 million.
“Revenue growth was mainly due to the strong performance of the logistics sector which recorded a revenue growth of 38.7 percent due to securing new projects, our warehouses operating at full capacity and the growth in the haulage business via the car carrieroperation.”
“It was a more challenging quarter for the GSA business, which saw a fall in outbound travel,” Enderby noted.
During the quarter under review Hemas raised Rs.4 billion through a rights issue to “pursue strategic investment opportunities in the core sectors of the group.”
The Esufally family said they would not subscribe to their rights entitlement as a number of foreign institutional investors had shown interest. As a result, the June interim financials showed foreign institutional investors and funds Templeton, First State, Wasatch, Grandeur Peak, Wasatch, Alliance Bernstein, and Matthews Asia increasing their holdings in the company.