Hemas Holdings PLC witnessed a recovery in Q2 with group revenue up by 19.2%, over Q1 FY20 and operating profit and earnings growing by Rs.662.7 million and Rs.633.1 million. The growth was driven by an improvement in our Consumer and Healthcare businesses and the normal positive seasonal trend at Atlas.
The Group recorded a consolidated revenue ofRs.28.9Bn for the 6 months endedSeptember 302019, 3.6% lower than last year. Operating profits for the first half of the financial year wereRs.701.5Mn, a Year-on-Year (YoY)decline of 70.8% in comparison to previous year. Group reported a loss ofRs.218.8Mn for the 6 months,” said Group Chief Executive Officer, Steven Enderby.
As discussed in detail in our Q1 release, profits were significantlycompressed by the impact of the Easter Sunday terrorist attacks and their aftermath.
“During the quarter, both our Consumer businesses have witnessed a steady recovery following subdued performance in the first quarter amid a general economic slowdown and the adverse impact of Easter Sunday attacks.
“Our monthly revenues from this segment returned to prior year levels by the end of Q2 and we reported a quarter on quarter growth in operating profit and earnings of Rs.598.6 million and Rs. 346.4 million respectively for the three months period in consideration.”
Due to the sharp slowdown in the first quarter, year-to-date consumer sector revenue stood at Rs.11.3 billion for the six months ending September 30, 2019, indicating a YoY decline of 6.8%.
Segment profits of Rs.630.7 million witnessed a drop of 57.5% over last year due to increased costs incurred with regard to promotional activities in further strengthening the Hemas brands.
Home and Personal care international segment remained depressed during the quarter due to heavy competition in the value added hair oil segment in Bangladesh coupled with increased duty and tariff under the new budget.
Consolidated healthcare sector revenue for the first half of the year stood at Rs.14.5Bn, a YoY increase of 8.3% whilst operating profit and earnings fell by 3.8% and 8.5%, due to declines at Morisonand Hemas Hospitals during the first quarter.The sector witnessed a significant recovery during the second quarter with revenues reporting a YoY growth of 9.0% and operating profits growth of 16.3% over last year.
Hemas pharmaceutical distribution operation registered satisfactory performance with the price increase on price-controlled pharmaceuticals becoming effective in May.Hemas Hospitals achieved an overall average occupancy of 54%, with profitability down on last year. Hemas Hospitals improved Q2 profitability over Q1 by approximately Rs.80.0Mn.
Morison PLC, our pharmaceutical manufacturing arm, achieved revenue of Rs.1.3Bn and operating profit of Rs.101.2Mn for the six months ended September 30, 2019, a growth of 3.3% and a decline of 8.9% respectively.
Hemas Leisure, Travel and Aviation business performance declined sharply with revenues down Rs.399.5Mn compared to last year. Although the tourist arrivals picked up moderately during the period from July to September compared to the previous quarter, the arrivals were still 35% lower than last year.
Serendib Group of Hotels recorded revenue of Rs.535.4Mn, a 31.8% decline over last year with an average occupancy of 56% across its hotels during the quarter, 21% below the occupancy achieved in the same quarter last year. Rates across all properties reduced during the period under review, in order to boost occupancy which led to a drop in profitability.
Hemas Logistics and Maritime recorded a revenue decrease of 16.4% over last year with revenues of Rs.1.2 billion. This is mainly attributable to the delays in the new Spectra distribution center ramp-up plans. Additionally, the segment profitability is impacted by the increased depreciation and finance costs resulting from the new facility.
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