Hemas year on year growth increase

Hemas Holdings recorded a turnover of Rs. 3.57 billion for the quarter ended 2007 September reflecting a year on year growth of 12 per cent. However this quarter was a challenging one for the company due to the high inflation, its Director/ Chief Executive Officer Husein Esufally said.

He said that higher input costs, increases costs of distribution and sustained high interest rates had an impact on operating margins for the quarter, which declined to 9 per cent from 14 per cent during the same period last year. Although the tax efficiency improved, an increase finance cost by 49 per cent resulted in profit after tax declining from Rs. 310 million to Rs. 176 million for the second quarter of the year.

For the quarter under review FMCG sector recorded a turnover of Rs. 1.048 billion which reflected a marginal decline vis-a-vis the corresponding quarter last year. Profits for the quarter declined to Rs. 100 million compared to Rs. 132 million in the same period in comparison to last year.

This is attributed to the increase in a few key ingredients as well as general cost increases, which could not be passed on, he said.

Price adjusted have been made in line with the market and margins in the subsequent quarter are expected to improve. Further, the key brands like Baby Cheramy, Clogard and Kumarika continued to grow market share.

In the healthcare sector turnover for the quarter under review grew by 9 per cent to Rs. 774 million. Here too high distribution and finance costs impacted profits, which declined 16 per cent to Rs. 33 million.

The refurbishment/ expansion of Southern hospital in Galle is progressing expected to be completed in April 2008. Construction of the 100-bed hospital in Wattala is also on schedule with commencement of operations planned for August 2008.

The performance of the leisure sector was adversely impacted by the closure of Hotel Serendib, Bentota during the summer season. As a result profit for the quarter amounted to Rs. 14 million compared to Rs. 29 million in the corresponding quarter last year.

The hotel is back in full operations and the sector is looking forward to a strong winter season. Hotel Dolphin, Waikkal continues to perform well with average occupancy of 80 per cent for the six months ending September 2007. Further transport and power sector turnover went up remarkably, he said.