Hemas turnover records Rs 3.8 b

Hemas Holdings recorded a Turnover of Rs 3.8 billion for the quarter ended June 2008 reflecting a year on year growth of 22%, a satisfactory performance in a challenging economic environment.

Although operating profits increased by 10% over the corresponding period to Rs. 389.6 Million, high interest rates continued to exert pressure on the business with finance costs increasing by 22% to Rs. 97.8 Million Director and Chief Executive Officer, Husein Esufally said.

As a result, Profit before Tax increased by a modest 5% to Rs. 293.5 Million. Group tax efficiencies, mainly as a result of the relocation of the FMCG factory to Dankotuwa, contributed to Profit after Tax increasing by 15% to Rs. 263.3 Million for the quarter under review.

The FMCG sector recorded a turnover of Rs. 1.1 Billion for the quarter, an increase of 5% over the corresponding period last year whilst post tax profits grew by 7% to Rs. 108.3 Million.

The business witnessed significant cost escalation of input and operating costs and was forced to pass these on by way of price increases.

This in turn has negatively impacted volumes, not only for our business but for the industry as a whole.

A healthy 28% increase in turnover in the Healthcare sector was recorded in the period under review to Rs. 884.4Million, primarily driven by the increased sales in the branded generic drug category.

However profit after tax declined by 19% to Rs 25.4 Million, mainly on account of start-up costs of the Hospitals together with higher finance costs.

The Leisure sector continued its lack luster performance reporting a profit after tax of Rs 4.0 Million although turnover increased by 36% to Rs 203.6 Million.

Growth was boosted by our entry into the shipping business with a successful first quarter as agents for Far Shipping Lines.

The quarter proved a good one for the sector’s Aviation segment, which includes Travel Agency operations and Passenger and Cargo GSA business.

In the Power sector, Turnover of Heladhanavi increased by 25% to Rs. 1.4 Billion mainly driven by the increase in pass through fuel costs.

Profit for the quarter decreased by 12% to 89.0 Million mainly as a result of high finance costs incurred in servicing the higher working capital requirement.