Hemas top line surges in 4Q; earnings flat as finance cost bites

Consumer goods juggernaut Hemas Holdings PLC saw its revenue for the quarter ended on March 31, 2023 (4Q23) surging, most likely amid price increases but the group’s earnings remained flat, as finance costs soared.
The group reported a revenue of Rs.32.2 billion for the quarter under review, up 52.6 percent year-on-year (YoY), while the cost of sales rose 45.1 percent YoY to Rs.22.3 billion, resulting in a gross profit of Rs.9.8 billion, up 72.6 percent. Despite the higher administrative and selling and distribution expenses, the group reported an operating profit of Rs.3 billion, up 96.5 percent.
However, the gains at operating levels were overshadowed by a finance cost of Rs.1.3 billion, up from Rs.60.1 million a year ago, reflecting the higher market interest rates.

The group saw its interest-bearing loans and borrowings surging to Rs.11.8 billion as at end-March 2023, compared to Rs.2.6 billion as at end-March 2022. 
The group’s income tax expense also rose 87.6 percent YoY to Rs.584.7 million, as a result of increased tax rates.
Accordingly, the group reported earnings of Rs.1.77 a share or Rs.1.05 billion in 4Q23, compared to earnings of Rs.1.78 a share or Rs.1.06 billion in 4Q22.
Meanwhile, for the year ended on March 31, 2023, the group reported earnings improving by marginal 0.5 percent YoY to Rs.4.2 billion, on a revenue of 113.9 billion, up 44.5 percent YoY.
The group’s consumer brands segment reported a revenue of Rs.15.2 billion in 4Q23, compared to Rs.8.3 billion in 4Q22 and the segment reported a net profit of Rs.1.3 billion, up from Rs.618 million a year ago.
The healthcare segment of the group, which includes pharmaceutical and hospital businesses, reported a revenue of Rs.16.7 billion, up from Rs.12.4 billion. However, the segment’s net profit declined to Rs.196.9 million, from Rs.638 million a year ago, amid increased finance costs.
The group’s mobility business recoded a lower revenue of Rs.344.7 million in 4Q23, compared to Rs.409.8 million in 4Q22 and saw its net profits declining to Rs.114.7 million, from Rs.303.8 million.
Hemas Group CEO Kasturi C. Wilson said exports and internationalisation would remain the focus areas for Hemas, which the group explores opportunities for organic and inorganic growth, primarily in consumer and healthcare spaces.   Esufally family owns over 60 percent of the issued shares of Hemas PLC.