Hemas Group earnings up

The Hemas Group has recorded a turnover of Rs 4.7 billion, a year-on-year increase of 18.6 percent and earnings of Rs 311.4 million, a growth of 25.9 percent for the quarter ended December 31, 2010.

Hemas CEO Husein Esufally said “For the nine months ended December 31, 2010, we recorded a turnover of Rs 13.4 billion, an increase of 18.2 percent from last year, with net earnings of Rs 899.1 million, up 59.2 percent 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.

“The FMCG sector posted a revenue of Rs 4.4 billion for the nine months ended December 31, 2010, a growth of 10.0 percent over the last year. However, the impact on margins due to increased raw material prices and CESS on imports has caused the sector profits to decline 7.8 percent from last year, to close at Rs 436.5 million for the 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.”

“Healthcare sector revenues and profits were boosted by the high growth in the pharmaceuticals business where both the top-line and the bottom line grew 26 percent year-on-year. The business did well to maintain shares in a strong growth market. During the quarter under review, we signed up with Mankind which specializes in acute and chronic therapies”, he said.

The steady buildup of the hospitals business, continued with a revenue growth of 77 percent, has enabled the business to achieve positive EBIT within two years of commencement of operations.

“Leisure sector revenues grew 47 percent year-on-year, to close the nine months at Rs 879 million, on the tourism recovery in post-war Sri Lanka. All our hotels are currently operating at high occupancies and are enjoying higher room rates. Sector profits for the nine months ended December 31, 2010 closed at Rs 1.3 million compared to a loss of Rs 25.5 million a year ago, he said.

Transportation sector enjoyed a revenue growth of 12.2 percent and a profit growth of 62.8 percent, to report a turnover of Rs 557 million and profits of Rs 197 million for the nine months under review. “There has been a significant increase in passenger and cargo volumes in aviation services businesses, and enhanced transshipment volumes in the maritime segment and growth in the freight business, resulting in all areas contributing well,” Esufally said.

Power sector recorded revenues of Rs 2.4 billion for the period under review, up 14.7 percent from last year, and profits of Rs 235 million which represents a growth of 115.9 percent. The thermal power plant Heladhanavi generated 482.4 million KWH of energy while their mini hydro plants generated 16.0 million KWH, reflecting plant factors of 73 percent and 53 percent respectively.

“The power generation at both our mini hydro plants was at highest levels as both catchments received healthy rainfalls. It is important to note that nearly 45 percent of our net profits are now derived from the hydro sector. Work relating to our new 2.4 MW project at Magal Ganga is progressing satisfactorily, and we are confident of keeping the project cost and timelines within initial budgets,” he said.

“Despite the short-term impact on the supply and demand of our consumer businesses caused by the widespread rains and flood, we look forward to closing the financial year with a healthy growth in performance,” Esufally said.