Sunshine Holdings delivers robust performance in 1H amidst macroeconomic challenges

• Consolidated revenue of Rs. 24.9 billion
• PAT increased by 28.2% YoY to Rs. 3.2 billion
• Healthcare revenue up 35.9% YoY to Rs. 11.6 billion
• Acquisition led growth in Consumer, revenue up 128.4% to Rs. 8.6 billion  
• Agri revenue up 34.4% YoY to Rs. 4.6 billion

Recording another quarter of sound financial performance in a challenging economic backdrop, diversified conglomerate Sunshine Holdings (has posted consolidated revenue of Rs. 24.9 billion for the six months ending 30 September (1HFY23), an increase of 57.7% YoY compared to the corresponding period of last year.

Profit after tax (PAT) for the period in review rose to Rs. 3.2 billion, an increase of 28.2% YoY, on the back of the profit arising from the improved performance in Healthcare, Consumer Goods and Agribusiness.

The gross profit improved by Rs. 1.9 billion, up 36.3% YoY compared to the previous year, in line with the Group’s revenue growth. Gross profit margin for the period in review stood at 29.4%, which is a contraction of 463 basis points against the same period last year.

Profits attributable to equity shareholders (PATMI) closed at Rs. 1.9 billion for 1HFY23, an increase of 60.0% YoY.

The Group’s Healthcare business emerged as the largest contributor to Sunshine’s top-line performance, accounting for 46.6% of total revenue.

In comparison, Consumer and Agribusiness sectors of the Group contributed 34.4% and 18.4% respectively of the total revenue.

In April 2022, Sunshine Tea Ltd., which is a tea export business, was acquired by the Group and its performance is consolidated under Consumer Goods sector w.e.f. 1 April.

Chairman Amal Cabraal said: “The Group faced multiple challenges across all sectors from the fall out of the macroeconomic issues faced by the country. However, incisive sales initiatives, robust cost management and process reengineering backed by numerous digital initiatives enabled Sunshine to record a healthy performance in 1HFY23. The resilience and adaptability displayed by all the sector and center teams in delivering these results are a matter of pride and confidence.

“Whilst the continuing economic challenges and shrinking real disposable income will be barriers to overcome, the Group remains optimistic that the initiatives in place will enable the delivery of sound results in the forthcoming periods.”

Healthcare

Group’s Healthcare segment generated Rs. 11.6 billion in turnover during 1HFY23, representing a significant growth of 35.9% YoY on the back of improved performance in Pharmaceutical and Medical Devices segments. Lina, the Pharma manufacturing business, experienced revenue growth mainly due to price revisions together with the revenue earned from Metered Dose Inhaler (MDI) sales to the government. The first MDI sale was made in the month of July 2022 marking the commencement of commercial operations in Lina Spiro. The Healthcare sector PAT increased by 51.7% YoY.

Consumer Goods

Recording a 128.4% increase in revenue compared to the corresponding period of last year, the Consumer Goods Sector recorded a revenue close to Rs. 8.6 billion. Export business accounts for 46.9% of the sector’s revenue. Excluding the new addition of Sunshine Tea, revenue growth stood at 21.3%. The PAT of the sector increased by Rs. 383 million compared to the same period last year.

Agribusiness

The Group’s agribusiness sector, represented by Watawala Plantations PLC (WATA) and Watawala Dairy Ltd. (WDL), saw a revenue increase of 34.4% YoY to Rs. 4.6 billion. The EBIT margin contracted due to reduction in crop volumes YoY and increased cost of bought crop. PAT of the Agri sector closed at Rs. 1.9 billion for 1HFY23, up by Rs. 45 million compared to the same period last year.