Financial Times

Hemas sees big returns from power
Hemas Holdings Ltd, the newest diversified blue chip listed on the Colombo bourse that has reported strong results in the nine months to December 31, 2003, expects its investments in the power sector to generate significant returns from the next financial year.

Group finance director M.S. Fonseka said the company was "quite upbeat" about its year-end performance and expects to exceed the forecast annual profit of Rs 520 million. Hemas' 50:50 joint venture with Lakdhanavi in the 100MW power plant coming up in Puttalam would be a significant revenue stream for the group in future.

The plant is forecast to generate a profit of $3 million in its first full year of operation, half of which would accrue to Hemas, Fonseka said. "The project is on track and we expect to be able to connect power to the grid by November," she said. "We expect substantial revenues which should start coming in straight away."

Hemas chief executive officer Hussein Esufally said the company reported "strong operating results in all key sectors" in the nine months to December with group after-tax profits at Rs 419 million, exceeding the profit of Rs 402 million for the full year ended March 31, 2003.

Profits included capital gains of Rs 33.4 million, largely from part divestment of the investment in Lanka Hospitals, owners of Apollo. Hemas also exited from its investment in eSenze Solutions, a small IT firm.

Fonseka said the group had invested in Apollo Hospital hoping it would complement its health care business but withdrew when it realised there would be no immediate fit. . "We felt the returns would be long term and also we needed cash for the power project." However, she did not rule out further investments in hospitals.

Back to Business