Hemas Holdings PLC’s Group (Hemas) earnings fell 32% to Rs.775 million for the year ended March 31, 2009 from the corresponding period in 2008 although overall group revenue increased to 8% to close at Rs.15.3 billion for the same period.
Hemas Chief Executive Officer Husein Esufally stated in the CEO’s review that the drop in earnings is largely attributable to planned startup losses and finance costs associated with new initiatives and the absence of any appreciation in the fair value of investment properly. However,
Mr. Esufally said that when these factors are isolated, the underlying businesses have recorded a revenue growth of 8% while maintaining last year’s profit levels. “Over the year, we had to face a challenging economic environment where inflation, interest rates and rupee depreciation were adversely impacting most of our key businesses,” he added.
Responding to the global crisis was a high priority according to Mr. Esufally. “The company conducted a strategic review and formed a hypothesis based on the assumption that Sri Lanka would not be totally immune to such a crisis, although our sectors are expected to be less vulnerable in such an environment,” he said. “Our plan was therefore to be conservative in projecting demand and to adjust our cost base accordingly.” Hemas adopted a series of productivity and cost improvement initiatives with a view to ensuring operating margins would not erode.
Mr. Esufally stated that over the course of last year, the company completed investment projects accounting for over Rs.3 billion in value. The first phase of the hospital strategy got underway with the hospitals in Wattala and Galle becoming fully operational. The Hemas Innovation Centre and the Fast Moving Consumer Goods (FMCG) production facility in Dankotuwa also commenced operations. Hemas also commissioned its first Mini-Hydro power plant in Kandy last year. |
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