Sunshine Holdings revenue up but profit dented by higher tax

Sunshine Holdings PLC reported a 7 percent rise in revenue for the financial year ended March 31, 2025, but rising tax costs and shrinking consumer margins dragged on bottom-line performance, narrowing its profit after tax.

The diversified conglomerate posted consolidated revenue of Rs. 59.3 billion for FY25, largely underpinned by robust growth in its Healthcare segment, which accounted for more than half of group revenue. 

However, group PAT dipped slightly to Rs. 5.9 billion, dented by a near 49 percent surge in income tax expenses and persistent pressure in the Consumer business.

“FY25 was a pivotal year for Sunshine H oldings, marked by resilience, disciplined execution, and renewed growth momentum across our core sectors,” said Group CEO Shyam Sathasivam. 

“Despite pressures on margins and shifts in demand, the Group maintained stable earnings and strengthened its foundation for long-term growth.”

Earnings before interest and tax (EBIT) came in at Rs. 9.3 billion, up 7.1 percent year-on-year, with an overall EBIT margin of 15.7 percent. The uplift was largely supported by scale efficiencies in Healthcare and cost optimisation in Agribusiness, while Consumer margins remained under strain.

The Healthcare sector grew revenue by 17.3 percent to Rs. 32.6 billion, benefitting from broad-based performance across its pharmaceutical agency, devices, retail, and manufacturing businesses. 

Lina Manufacturing, the Group’s pharma production arm, saw revenue surge 69.2 percent year-on-year, driven by higher metered dose inhaler (MDI) output that met full government demand in 2024.

Healthguard Distribution also posted a strong 23.9 percent revenue increase, backed by new distribution deals with Cipla and Micro Labs, while the pharmacy retail chain saw more modest growth of 9.2 percent. 

In contrast, the Consumer segment recorded a 3 percent revenue decline to Rs. 18.7 billion, reflecting subdued domestic demand, particularly in the first half of the year. Domestic branded tea revenue fell 8.8 percent despite a marginal volume rise, weighed by VAT-related pricing pressure. Confectionery revenue slumped 28 percent as consumer sentiment remained weak and competition intensified.

Still, the export side of the Consumer business provided some cushion, rising 19.1 percent year-on-year on the back of stable client demand.

Agribusiness, represented by Watawala Plantations PLC, saw a 4.5 percent dip in revenue to Rs. 7.9 billion, with underperformance in the dairy segment and lower volumes in palm oil. However, EBIT margins improved to 36.2 percent, up from 32 percent last year, due to cost savings in the palm oil operations.