Strong first half 2021/22 performance from Hemas
View(s):Hemas Holdings PLC (HHL) has delivered a strong first half (April to September 2021) amidst a challenging operating environment with half of the second quarter being under an island-wide lockdown.
The cumulative group revenue stood at Rs.36.2 billion, an increase of 19.8 percent over last year. During the quarter under review, an unprecedented level of input cost inflation and foreign exchange volatility resulted in the group witnessing profitability pressure. The overall cumulative operating profit of Rs.2.6 billion remained constant over last year whilst the group earnings of Rs.1.6 billion is an increase of 1.7 percent, Group CEO Kasturi C. Wilson has said in her review of the company performance.
During the quarter, underlying business grew by 14.7 per cent over last year. New revenue streams across businesses grew over 100 percent whilst contributing to 7.5 percent of the total group revenue. The group operating profit and earnings of Rs.1.5 billion and Rs. 944.1 million saw a year-on-year decline of 23.9 per cent and 26.6 per cent respectively, underpinned by the cost inflation.
The review noted that the pandemic continued to influence consumer behaviour, sales mix and market channel dynamics. Footfall in the modern trade was impacted during the lockdown whilst general trade saw a stable growth. Basket value was skewed towards food and essentials, impacting shopper patterns for non-essential items. The quarter witnessed escalation in commodity prices by approximately 50 percent over last year.
Operating conditions in Bangladesh continued to be challenging, with the quarter impacted by lockdown restrictions which were lifted in mid-August.
Trade union action of teachers and principals in the past three months affected online teaching at all government schools, adding more pressure to the prolonged closure of schools.
The Consumer Brands sector recorded a cumulative revenue of Rs.12.8 billion, a growth of 13.3 percent over last year. However, sector cumulative earnings of Rs.727.8 million witnessed a year-on-year decline of 10.3 per cent.
Market demand for healthcare services and medicines increased during the peak of COVID-19 cases. However, overall footfall of non-COVID patients dropped by more than 50 per cent at all private hospitals.
The Healthcare Sector reported a cumulative revenue of Rs.22.2 billion, a growth of 23.6 percent over last year whilst sector profit of Rs.1.8 billion was a 15.6 percent growth over last year. “Against a challenging operating environment, I am encouraged by the progress we have made in the first half of the year. We will continue to execute our strategies for margin recovery. Our resilient financial discipline supports the group’s growth strategy by driving efficiency and productivity through various lean initiative measures, controlling discretionary spending, driving down working capital and sustaining return on capital employed,” the CEO said.