Sunshine Holdings delivers record FY24 results propelled by healthcare and consumer sectors

 Chairman Amal Cabraal (left) and Group CEO Shyam Sathasivam

• FY24 revenue of Rs. 55.5 billion, up 7%
• Healthcare sector revenue growth of 16.1% YoY to Rs. 27.7 billion

Diversified Sri Lankan conglomerate Sunshine Holdings PLC has recorded resilient revenue growth amidst the backdrop of a moderately stable macroeconomic conditions, reporting notable top-line and bottom-line growth during the year ended 31 March 2024. 

Group’s Healthcare and Consumer sectors led growth while healthcare segment remained the major contributor to total Group revenue in FY24. Sunshine recorded a consolidated Group revenue of Rs. 55.5 billion for the year ended 31 March, a 7% Year-on-Year (YoY) growth. Profit after tax (PAT) for the period in review increased by 66.4% to Rs. 6 billion. The gross profit also increased by Rs. 3.7 billion, representing a robust 27.6% YoY growth, primarily driven by the margin expansion in both the healthcare and consumer segments. The gross profit margin for the period stood at 31%, marking a significant improvement of 500 basis points compared to the previous year.

The Group’s robust financial performances were declared at a time when the International Finance Corporation (IFC) announced a proposed equity investment of up to Rs. 3.2 billion in its healthcare arm, Sunshine Healthcare Lanka (SHL). Subject to satisfaction of conditions, IFC will own approximately 14.7% of SHL. The investment further underscores the confidence of international agencies in Sunshine Holdings’ growth plans.

The Group’s Healthcare business emerged as the largest contributor to Sunshine’s revenue, accounting for 50% of the total, while Consumer Goods and Agribusiness sectors of the group contributed 34.8% and 15% respectively of the total Group revenue. The Group operating profit (EBIT) closed at Rs. 8.7 billion, an increase of 23.7% YoY. Additionally, the Group’s finance cost for the period in review decreased to Rs. 1.2 billion from Rs. 1.5 billion in the previous year.

Sunshine Holdings PLC Chairman Amal Cabraal remarked, “Despite the persistent economic challenges during FY24, Sunshine Group has shown remarkable resilience and agility. All key sectors have delivered robust performance. Our steadfast commitment, strategic execution, prudent fiscal management, and innovative practices have enabled us to successfully navigate the market’s complexities.”

Sunshine Holdings Group CEO Shyam Sathasivam stated, “Our achievement of crossing the Rs. 6 billion PAT mark for the first time in Sunshine Holdings’ history is a testament to the exceptional capabilities and dedication of our team. It is their commitment and spirit that have driven our business to this remarkable milestone. The Group’s robust internal processes, investments in digital capabilities, and focus on operational excellence have been pivotal in delivering this performance. I am proud of our team’s ability to adapt and excel in a challenging economic landscape, and confident that their continued resilience and ingenuity will propel us towards even greater achievements in the future.”

Healthcare

The healthcare sector recorded a revenue of Rs. 27.7 billion during FY24, an increase of 16.1% YoY backed by the improved performance in Medical Devices and Manufacturing segments. The Pharma segment revenue remained flat while the Medical Devices segment grew by 28.1% YoY driven by both price and volume increase. Revenue of Healthguard Pharmacy, the retail segment, saw a 19.2% YoY increase during the period in review.

Lina Manufacturing, the Pharma manufacturing business of the group, recorded an impressive revenue growth of 137.4% YoY, driven by higher volumes in the Metered Dose Inhaler (MDI) plant. The group’s Healthcare sector EBIT was Rs. 4.3 billion.

Consumer Brands

The consumer sector, which includes both export and domestic business, reported a 1.6% YoY revenue increase to Rs. 19.3 billion in FY24. Domestic consumer business showed impressive performance in FY24, with the Group’s consumer brands continuing to grow market shares. The combined Tea category experienced a volume growth of 10 % YoY and a value growth of 37.6% YoY. The confectionery segment revenue declined by 7.1% YoY, despite an increase in price, due to a volume contraction of 25.7% YoY. PAT from the Consumer segment significantly increased by 118.5% YoY due to the growth in the domestic tea business and finance cost savings. The export segment revenue declined by 22.5% YoY due to lower tea prices and declining volumes in specific export markets.

Agribusiness

The Agribusiness sector of the Group, represented by Watawala Plantations PLC (CSE: WATA), reported a revenue of Rs. 8.3 billion, down by 5.1% YoY. This was due to the decline in revenue of the palm oil business, down 9.3% YoY. However, palm oil production increased by 15.1% YoY to 15.7 million kgs in the current period compared to 13.7 million kgs in the same period last year. The PAT of the Agri sector closed at Rs. 2.4 billion for FY24, up by 2.9% YoY. Dairy business revenue grew by 29.7% YoY due to increases in both sales volume and milk price.