Business Times

Hemas earnings up by 59.2%, strong growth from healthcare, transportation, leisure

Hemas Holdings, a large Colombo conglomerate, says that despite the short-term impact on the supply and demand of its consumer businesses caused by the widespread rains and flood, the group was hoping to close its financial year ending March 31, 2011 with ‘a healthy growth in performance’.
The promise was made by CEO Husein Esufally in the group’s third quarter results ending December 31, 2010 released to the market on Tuesday.

The report said the group has recorded a quarterly turnover of Rs 4.7 billion, a year-on-year increase of 18.6% and earnings of Rs 311.4 million, a growth of 25.9%. For the nine month to December, Hemas recorded a turnover of Rs 13.4 billion, up 18.2% from last year. During the year, the group’s performance was bolstered by the growth in Power, Healthcare and Transportation sectors, together with the recovery in the Leisure sector, Mr Esufally’s statement said.

The FMCG sector posted a 9-months revenue of Rs 4.4 billion but the impact on margins due to increased raw material prices and CESS on imports caused the sector profits to decline 7.8% from last year, to close at Rs 436.5 million for the same nine months.

“During the year, our sanitary napkins brand Fems and snack foods brand Mr Pop were re-launched, and the market response has been quite satisfactory,” the statement said. The steady buildup of the hospitals business, continued with a revenue growth of 77%, which has enabled the business to achieve positive EBIT within two years of commencement of operations. The new laboratory which was opened in Ragama during the year has delivered results beyond expectations.

Leisure sector revenues grew 47% year-on-year, to close the nine months at Rs 879 million. All Hemas hotels are currently operating at high occupancies and are enjoying higher room rates. Sector profits for the nine months ended 31 December 2010 closed at Rs 1.3 million compared to a loss of Rs 25.5 million a year ago. Transportation enjoyed a revenue growth of 12.2% and a profit growth of 62.8%, to a turnover of Rs 557 million and profits of Rs 197 million for the nine months.

The power sector recorded revenues of Rs 2.4 billion for the period under review, up 14.7% from last year, and profits of Rs 235 million which represents a growth of 115.9%. “It is important to note that nearly 45% of our net profits are now derived from the hydro sector,” the CEO said.

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