Diversified conglomerate Sunshine Holdings PLC posted a consolidated revenue of Rs. 16.3 billion in FY15, an improvement of 11.1 percent year-on-year (YoY).
Key business segments, particularly Healthcare and Agribusiness, grew above industry averages despite challenging conditions.
There was growth across the board; fast moving consumer goods (FMCG), healthcare and agribusiness revenues grew at 20.4 percent, 10.2 percent and 9.6 percent respectively YoY; group profit after tax (PAT), however, was affected partially by goodwill written off (Rs. 62 million) and declined by 10.4 percent to Rs. 1,047 million for the financial year ended March 31, 2015.
“Despite the challenging conditions in many of our key segments, we were successful in increasing revenue growth above industry averages; this healthy financial performance underscores Sunshine Holdings’ solid fundamentals,” Sunshine Holdings PLC Group Managing Director, Vish Govindasamy said. “The company’s visionary strategic initiatives are continuing to pay dividends in boosting long-term growth – such as the diversification into palm oil – and we remain optimistic about future prospects, despite potential future challenges.”
“As a group we are primarily focused on long term performance; Sunshine Holdings takes much satisfaction from achieving these results, which indicate steady growth in the different business segments,” Sunshine Holdings PLC Chairman, Munir Shaikh said.
Healthcare, which accounted for 37.2 percent of the group’s turnover for the period, posted strong revenue growth at 10.2 percent YoY to Rs. 6.1 billion; however, stagnation in overall market growth, according to IMS data adversely impacted the pharma segment (which accounted for 67.3 percent of Healthcare revenue in FY15).
Despite difficult market conditions, revenue from pharma grew 9.7 percent YoY to Rs. 4.1 billion while Surgical, Retail, Diagnostics and Wellness sub-sectors expanded 18.1 percent, 14.9 percent, 9.7 percent and 3.5 percent YoY. Partly as a result of the one-off goodwill write-down referred to in preceding paragraphs, PAT for Healthcare declined 35.8 percent YoY to Rs. 228 million; normalized PAT (adjusting for goodwill write-off) amounted to Rs. 289 million.
FMCG, which accounted for 18.3 percent of group revenue in FY15, reported robust growth of 20.4 percent to Rs. 3.0 billion boosted by both volume and price growth.
Driven by the sale of ‘Watawala Tea’, the branded tea sub-sector achieved 11.6 percent increase in sales (based on volume) of 3.1 million kg. PAT for the FMCG segment improved 27.8 percent YoY to Rs. 397 million in FY15, with margin increasing to 13.3 percent in FY15 from 12.5 percent a year earlier.
Again, despite difficult market conditions for tea and palm oil, the Agri sector posted a resilient 9.6 percent YoY growth to Rs. 6.8 billion and contributed 41.9 percent of total group revenue in FY15.
Continued adherence to good agri practices yielded dividends in higher volumes – 3.9 percent YoY in Tea and 8.9 percent YoY in Palm Oil – which partially helped mitigate the adverse impact of market conditions.
PAT for FY15 was lower at Rs. 408 million, compared to Rs. 434 million in FY14, mainly due to the downturn in tea, which recorded a net loss of Rs. 428 million for FY15. Poor weather, combined with a significant decline in the price of Ceylon Tea in global markets and other external factors, eroded profits.
Timely strategic diversification to Palm Oil, which recorded a PAT of Rs. 780 million for FY 15, continued to boost the Agri sector and more than compensated for losses in both tea and rubber, despite a global decline net selling average (NSA) of Palm Oil, in FY15, in line with the drop in global crude oil prices.
Revenue in the packaging segment declined 7.9 percent to Rs. 270 million in FY15; the lull in sales in both tea and confectionary industries took a toll. PAT was a negative Rs. 24 million for the year. There was however a turnaround in the fourth quarter of FY15; increasing export orders resulted in a PAT of Rs. 2 million in that period.
There was a boost to growth in the renewable energy division, by 16.3 percent to Rs. 113 million in FY15; what makes this creditable is that this was only the second year of operation.