Hemas Holdings PLC (HHL) has seen its earnings decline due to start up costs of new business ventures, according to CEO, Hussein Esufally.
In a statement to shareholders on the results for the nine months to December 2008, he said, “ whilst we foresee many a challenge going forward in terms of tougher economic conditions, we have an optimistic view with regard to the domestic political outlook, which we believe will create many opportunities for Sri Lankan businesses.”
He said the group will be proactive to the changing business environment by staying attuned to the customer needs of ‘our core businesses whilst also focusing our efforts to ensure the success of the new ventures we have embarked on.’
The company which completed 60 years of business operations in December 2008, also saw it entering into several new industries. During the nine months in the 2008-09 period, group turnover grew 16% to Rs 11.8 billion but operating profits declined 9% to Rs 974 million.
He said that group earnings during this period was Rs 574 million, a drop of 14% compared to the last corresponding period. For the quarter ended 31 December 2008, the group turnover was Rs 3.9 billion, up 13% year-on-year, while group earnings stood at Rs 199 million (down 24% year-on-year).
The healthcare sector which saw the 100- bed hospital in Wattala operations in December, recorded a turnover of Rs 2.8 billion for the nine months ending 31st December, representing a 23% growth over the corresponding period last year.
Mr. Esufally said that initial operating losses of the hospital operation contributed to a 24% drop in operating profits of the healthcare sector, which stood at Rs 135 million for the nine months ending 31st December.
“There has been some delay in completing the new wing at Southern Hospital, Galle which is now expected to be completed by March 2009,” he said.
The company saw its fast moving consumer goods (FMCG) recorded a turnover of Rs 3.5 billion, an increase of 13% over the corresponding (9-month) period last year.
The company's leisure sector recorded a turnover of Rs 699 million for the nine months under review, a marginal five percent decline year-on-year. Operating profit for the nine months in this sector was Rs 27 million, a decline of 20% over last year. Mr. Esufally said Hotel Dolphin, Waikkal maintained occupancy levels over 85% while the two properties in Bentota and Sigiriya achieved average occupancies of only 40%. “Exchange losses due to the appreciation of the Rupee against the Sterling also impacted profits of the sector,” he added.
The transportation sector for the nine months recorded a 21% increase in revenue to Rs 532 million which is a 68% growth in operating profits, which stood at Rs 197 million. Mr. Esufally said that an acquisition of a minority stake in Mercantile Shipping PLC was made during the quarter. |
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