Business Times

Hemas reports 85% 1H11 earnings growth

Diversified Sri Lankan conglomerate Hemas Holdings this week reported Rs. 588 million in consolidated earnings for the first half of its latest financial year, a period ending September 30. This was indicated to be a growth of 85% over the corresponding period in 2009.

While consolidated group revenues were indicated as Rs. 8.7 billion, a growth of 18% over the previous year. This is a performance "mainly driven by growth of our Healthcare and Power businesses", according to its Chief Executive Husein Esufally.

Also revealed was healthcare turnover topped Rs. 3.1 billion, a 30% year-on-year growth, with earnings also virtually doubling to Rs. 122 million.

This was mainly the result of pharmaceuticals. However, it was also noted that, along with winter hotel volumes, hospitals would drive continued growth expectations over the rest of 2010, spurred on by the first of the company's hospitals, based in Wattala, achieving a cash break-even position in May 2010. Additionally stated was that "Hemas Power experienced an impressive first half, recording a revenue of Rs. 1.6 billion, a growth of 17% year-on-year and earnings of Rs. 153 million."

It was also noted that improved profitability in most businesses, resulted in "significant margin improvements" for the group to the tune of 10.3%, from 8.4%, in terms of group operating margin and 6.8%, from 4.3%, in the case of group net margin.

The company's fast moving customer goods business showed 8% turnover growth to Rs. 2.9 billion even though its profitability dropped by 5% to Rs. 249 million year-on-year. This was indicated to be a result of a new CESS levy on imported materials that negatively affected sector gross margins.

It also emerged that the company's transportation sector businesses recorded revenues of Rs. 374 million compared to Rs. 332 million last year while earnings were Rs. 133 million, a 46% year-on-year growth. While leisure sector activities revenue was Rs. 489 million as opposed to Rs. 341 million the previous year, with a reduction in losses to Rs. 8 million from Rs. 37 million recorded last year.

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