Sri Lanka Hemas profit lifted by transportation, health care

Feb 15, 2011 (LBO) - Sri Lanka's Hemas Holdings net profit for the December 2010 quarter rose 26 percent to 311 million rupees from a year ago mainly on gains from its transportation and healthcare businesses, a stock exchange filing said.

Sales for the quarter rose 19 percent to 4.7 billion rupees. Earnings per share adjusted for a share split rose to 0.61 rupees from 0.49 rupees.

For the nine months ending December 31, 2010, Hemas group net profit rose 59 percent to 899 million rupees while sales rose 18 percent to 13.4 billion rupees.

The December 2010 quarter results showed Hemas fast moving consumer goods business profits fell to 142 million from 165 million while its transportation sector profit more than doubled to 64 million rupees and healthcare shot up to 64 million rupees from 27 million rupees.

The group's leisure sector profits fell to nine million rupees from 11 million the year before with a sharp rise in finance costs despite higher sales on a recovery in tourist arrivals while power sector profit fell to 82 million rupees from 105 million rupees.

Chief executive Husein Esufally said that 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.

"FMCG sector posted a revenue of 4.4 billion rupees for the nine months ended December 31, 2010, a growth of 10.0 percent over last year," he said in a statement.

"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 436.5 million rupees for the nine months."

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 from the previous year, he said.

"The business did well to maintain share in a strong growth market," Esufally said.

"The steady build-up of the hospitals business, continued with a revenue growth of 77 percent, which has enabled the business to achieve positive EBIT (earnings before interest and taxes) within two years of commencement of operations."

Leisure sector revenues grew 47 percent from the previous year to 879 million rupees on the back of the tourism recovery in post-war Sri Lanka.

"All our hotels are currently operating at high occupancies and are enjoying higher room rates," Esufally said.

The hotels made a profit of 1.3 million for the nine months to December 2010 compared to a loss of 25.5 million rupees a year ago.

"Transportation sector enjoyed a revenue growth of 12.2 percent and a profit growth of 62.8 percent, to report a turnover of 557 million rupees and profits of 197 million for the nine months under review," Esufally said.

"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 the power sector profits rose 116 percent to 235 million in the nine months.

"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."

source - www.lbo.lk