Hemas reports strong performance in 2020/21
View(s):
Ms. Kasturi C. Wilson
Hemas Holdings PLC (HHL) has reported another resilient performance in the 2020/21 financial year with Home and Personal Care (HPC) and Learning segment represented by Atlas along with Healthcare being the significant contributors to the robust performance.
“The third wave of the COVID-19 pandemic is expected to further disrupt the day-to-day business operations and create uncertainty and volatility in the economic environment. Inflation and currency devaluation are expected to add pressure on group’s profitability. However, the group will continue to focus on its strategic priorities and pursue a balanced top-line and bottom-line growth while contributing to support the government in its efforts to rebuild the nation,” said group CEO Kasturi C. Wilson in her annual review to shareholders on the financial year ending March 31, 2021.
HHL recorded a group revenue of Rs.16.6 billion for the quarter ended March 31, an increase of 18.3 percent over the corresponding period last year. Group operating profit for the quarter under review at Rs.1.3 billion is a growth of 58.8 percent over Rs.829.7 million recorded last year whilst the group earnings of Rs.859.8 million is an increase of 79.2 percent over last year.
In a media release, the CEO said that despite the challenges encountered in the macro economic environment and the intensity of the competitive landscape, the group recorded a cumulative underlying revenue of Rs.64.5 billion for the FY 2020/21, a 11.3 percent growth against FY 2019/20, after adjusting for the disposal of Serendib Hotels PLC, Travel and Aviation segment and N*able. Similarly, the cumulative underlying group operating profit of Rs.6 billion for the year was a year-on-year increase of 56.2 percent over Rs.3.8 billion recorded last year. “As the group rationalised its portfolio and focused on re-energising the core, the group stepped up and delivered a cumulative underlying performance for the year surpassed results of FY 2018/19, the most recent year in which normalcy prevailed,” it said.
The Consumer Brands sector revenue for the quarter was Rs.5.8 billion, an increase of 43.1 percent over the corresponding quarter last year. Full year revenue recorded an increase of 5.3 percent compared to last year due to improved performance of the HPC sector including HPC Bangladesh. However, the prolonged closure of schools which resulted in a contraction of the market, had an impact on the company’s ‘Learning Segment’, Atlas.
During the quarter, changes in consumer behaviour and channel dynamics led to a slowdown in the market and basket sizes compared to the preceding quarter. Nevertheless, the shift in consumer preference towards personal hygiene and home care products continued and resulted in the group experiencing a robust year-on-year growth across all categories in the HPC Sri Lanka portfolio.
HPC Sri Lanka commenced distributorship of its new global partnership brands in the form of Nivea, L’Oréal and Garnier after a successful transitioning from Morison, with the primary objective of unlocking value through cross functional synergies.
The learning segment, Atlas experienced a strong year-on-year growth during the quarter due to the gradual reopening of schools, especially in the Western Province. The company also grew its market share and profitability, positively impacting on the company’s contribution to the sector.
Healthcare sector recorded a revenue of Rs.10 billion during the quarter against Rs.8.9 billion over the corresponding period last year, an increase of 12.3 percent. The growth in the sector was collectively driven by Pharmaceutical Distribution and Manufacturing businesses. Cumulative revenue and earnings for the year was Rs.37.2 billion and Rs.2 billion in comparison to Rs.31.4 billion and Rs. 1.4 billion reported in the preceding year.
Hospitals’ business witnessed a positive quarter on quarter momentum in patient footfall. Additional revenue streams such as mobile lab services, home care services and Kaya Intermediary care centre supported revenues for the quarter. Hemas Hospitals also opened its own laboratory to test PCR samples during the latter part of the quarter.
Ms. Wilson said the group will remain a purpose-led organisation which anchors its strategies around enriching lives of its communities.