Hemas plans hospitals in residential towns, banks on rising middle class

By Duruthu Edirimuni Chandrasekera

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The Hemas Group, bullish on the healthcare sector, is planning hospitals in residential middle class locations, officials said.

“There’s a real opportunity with the growth in the middle class (in this sector), so we’re planning locating hospitals in residential, middle class neighbourhoods,” Husein Esufally, CEO Hemas told the Business Times.

Husein Esufally

He also said that the nature of the hospitals will see a change in the coming 10 years. “People’s incomes are rising and we expect a migration of public sector patients to the private sector hospitals. Also non communicable diseases (such as diabetes, heart related illnesses, etc.,) are on the rise. This poses an opportunity for quality healthcare,” he explained.

Healthcare sector’s revenue and earnings growth was primarily driven by the performance of Hemas’ Pharmaceuticals business, which benefited from the healthy growth of the market to post an increase in top line of 21.927 per cent, Mr. Esufally said. During the second quarter of 2012/13 he said the healthcare business grew its market share to 17.6 per cent, despite the negative impact caused by the depreciating currency.

He noted that the business posted a healthy profit growth of 27 per cent. “Our hospitals’ business experienced an inpatient capacity nearing 80 per cent at Wattala hospital, contributing to the increase in hospital revenues of 30.3 per cent to Rs. 660 million.”

The company said in a media statement that Hemas posted revenues of Rs. 12.9 billion, a growth of 29 per cent over the previous year.
It said that the main contributors were Power, Healthcare and FMCG sectors, which recorded growth levels of 50.4 per cent, 22.9 per cent and 17.2 per cent respectively. Group operating profits recorded a growth of 50.6 per cent to post Rs. 1,036 million while earnings for the half-year was Rs. 705 million a year-on-year growth of 44.9 percent.

Hemas’ leisure sector recorded a revenue of Rs. 656 million, a growth of 44.9 per cent. The performance of Hotel Dolphin helped the sector swing its earnings from a negative Rs. 33 million to a positive Rs. 42 million, the media statement said. “Our hotels experienced a good first half recording an overall occupancy in excess of 70 per cent, in a period which was predominantly the ‘low season’.
The sector’s performance was enhanced by our inbound tour operation, which recorded atop line growth of 34 per cent for the period, largely driven by increasing volumes.”

The transportation sector posted a top line of Rs. 465 million, a 29.4 per cent growth over the previous year.

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