The first quarter of 2019/20 has been a challenging period for Hemas with revenues 2.3% below last year said Chief Executive Officer, Steven Enderby.
“This has been, primarily, a result of the terrorist attacks of April 21, with the aftermath causing economic slowdown and difficult trading conditions”.
“Our profitability has been more significantly impacted as we recorded a loss before tax of Rs.140 million (Mn). Key factors in this have been in the business mix with our higher margin Consumer businesses experiencing a slowdown while our lower margin healthcare businesses grew revenue by 7.6%. In line with the sharp downturn in the tourism industry, our Leisure and Travel interests incurred a loss at earnings level of Rs.129Mn”.
The environment has resulted in weak performance across the Group in particular at Morisons and N*able. We were also impacted by a number of one-offs totaling Rs.130 Mn including a charge from the adoption of SLFRS 16.
We incurred a dividend tax charge of Rs.278 Mn following the upstreaming of dividends to pay our final dividend and redeem our listed debenture. During the quarter, both our Consumer businesses have been impacted by market wide weak consumer sentiment and baseless ethnically divisive attacks on our business and brands. There is ongoing improvement into Q2 as we push hard to return to normal business levels as quickly as possible.
“Our consumer sector revenue stood at Rs.4.6Bn for the three months ending June 30, 2019, a YoY decline of 14.3%. Latest market data indicates an overall contraction of the Personal Care market by 4% in Q1. Morison OTC segment recorded a drop in revenue by 28.4% amounting to Rs.177.2Mn although OTC products such as Lacto are now gaining traction”.
Atlas performance was subdued due to the factors referred to above and during the month of May schools were closed as a result of the prolonged emergency situation in the country.
Home and Personal Care international revenues increased by 7.4% following the relaunch of Kumarika in May, contributing positively towards the segment results.
Consolidated healthcare sector revenue for the first three months under review stood at Rs.6.9Bn, a YoY increase of 7.6% whilst operating profit and earnings fell by 23.9% and 29.8%, due to depressed profits at Morison’s and Hemas Hospitals.
Morison pharmaceutical manufacturing arm posted a revenue of Rs.488.9Mn and operating profit of Rs.21.9Mn for the three months ended June 30, 2019, a decline of 18.1% and 61.1% respectively. Hemas Logistics and Maritime recorded a revenue decrease of 14.6% over last year with revenues of Rs.613.6Mn.
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