Financial Times

Hemas rests hopes on peace talks for tourism revival
Hemas Group, among the biggest conglomerates in the country with a huge stake in tourism, is resting its hopes on the upcoming peace talks in Geneva between the government and the LTTE to revive tourism.

Husein Esufally, Chief Executive Officer in his review of the group’s latest 9-month period to end December 2005, said the recovery for the tourism industry from the tsunami has been slower than expected while a resumption of hostilities in the northeast has made matters worse.

“Tourist arrivals were down and resort occupancies even more so. In this environment, the Leisure Sector’s performance was below expectations, recording a loss of Rs 33 million in the period under review including a capital gain of Rs 30 million on account of the divesture of Hemas’ 47% stake in Associated Hotels,” he said adding that the sector is cautiously optimistic about prospects for the rest of this winter season and the forthcoming summer season with much depending on revived peace talks.

However profits and turnover rose to Rs 599 million and Rs 7.1 billion, respectively, up by 21.3 % and 13.4% from the previous 9-month period. This year’s profit growth was mainly on account of the contribution from the power sector and good performances by the transportation and FMCG Sectors. Profit growth for the quarter ended 31 December 2005 was 11.3% and was adversely impacted by the decline in the Leisure Sector performance during this quarter.

The FMCG sector continued to perform well posting a revenue growth of 9.8% and profit growth of 18.1% over the nine months. Market demand continued to be strong and the sector did well to maintain or improve market share across most major categories, the CEO review said.

The healthcare sector recorded a turnover growth of 11.5% and a profit growth of 9.1% with the last reported quarter seeing a downsizing of the group’s own brand business.

Esufally said the transportation sector continued its impressive performance this year, with a 26.9% turnover growth and a 52.5% profit growth for the nine month period. An overall growth in passenger travel and cargo movements has helped all areas of this sector to perform well and post healthy growth rates.

“Looking ahead over the short term, we are hopeful of a good final quarter enabling us to close out the year on a high note, “ Esufally added.

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