Sri Lankaâ€™s Hemas Group Dec quarter profit flat
ECONOMYNEXT – Sri Lanka’s Hemas Holdings said December 2016 quarter group net profit was virtually flat at Rs864 million compared with a year ago with tax hikes hurting its healthcare business while logistics and maritime sector earnings surged.
December 2016 quarter sales grew 14.4% to Rs11.3 billion from a year ago, according to interim results filed with the stock exchange.
The group’s fast moving consumer goods and health care business profits were down slightly in the December quarter, profits from the leisure sector went up slightly while earnings from the logistics and maritime business rose 340% up to Rs101 million.
Diluted quarterly earnings per share were Rs1.51. The Hemas share was last traded at Rs104.50.
For the nine months ending December 2016, Hemas reported diluted EPS were Rs4.20 with group sales up 12.9 percent to Rs31.9 billion and net profit up 26.1% to Rs2.4 billion.
Hemas group chief executive Steven Enderby said the firm faced "increasingly challenging operating conditions across most sectors" in the December quarter.
"We anticipate a challenging last quarter for our businesses with the latest developments in the macroeconomic context," he added.
"Increasing VAT (value added tax) rates and the introduction of VAT at hospitals, new pharmaceutical pricing regulation, and increasing inflation have impacted Q3 profitability," he said.
"During the last quarter, healthcare sector experienced challenges arising from new pharmaceutical price regulation and the introduction of VAT on specified hospital services," he said.
But Hemas group pharmaceutical distribution operation recorded a “solid performance” over last year with an increased volume growth, Emderby said.
"Our hospitals also delivered good growth over last year with its latest investments in bed expansion in Hemas Hospital Wattala and a range of new surgical specialties and medical equipment."
Hemas group also saw higher sales and distribution costs in Bangladesh as it grow its operations there.
Hemas also had continued losses at its new hotel, Anantara Peace Haven Resort in Tangalle, its joint venture with Thailand’s Minor Group, although performance was helped by more tourist arrivals in the December quarter, the start of the peak season, Enderby said.
N*Able, the information technology arm of Hemas, performed behind last year, Enderby said.
The growth in Hemas group logistics and maritime business was driven by its new maritime agency for the Evergreen shipping line. (COLOMBO, Feb 09 2017)