Sunshine Holdings delivers robust performance in 1H

Chairman Amal Cabraal 

• Consolidated revenue up 13% to Rs. 28.2 b
• PAT up 15.4% to Rs. 3.6 b
• Healthcare revenue up 19.2% to Rs. 13.8 b
• Consumer revenue up 13.2% to Rs. 9.7 b
• Agribusiness revenue rose to Rs. 4.6 b

Diversified Sri Lankan conglomerate Sunshine Holdings PLC said it continued to demonstrate resilience amidst prevailing macro-economic conditions, reporting solid top-line and bottom-line growth of 13.0% and 15.4% YoY. 

The Group recorded a consolidated revenue of Rs. 28.2 billion during the first half of the current financial year (1HFY24) with Profit after tax (PAT) increased to Rs. 3.6 billion as a result of lower finance costs during the period. The revenue increase was mainly due to robust revenue growth in key sectors of the Group —healthcare, consumer and agribusiness. 

The Group’s healthcare sector emerged as the largest contributor to Sunshine’s top-line, accounting for 49.2% of total revenue, with consumer at 34.4%, and agribusiness 16.3% of the total revenue.

Commenting on the performance, Sunshine Holdings Chairman Amal Cabraal remarked that, “Amidst a business landscape where there was a positive shift in key macroeconomic indicators such as reduced inflation, lower interest rates, and the strengthening of the Sri Lanka Rupee, its pleasing to note the Group’s strong performance in 1HY24. The substantial growth in both revenue and profit can be attributed to the resilient contributions from all business sectors. Lina Manufacturing, acquired in a strategic merger with Akbar Pharmaceuticals in 2020, played a pivotal role in boosting the Group’s overall performance during the first half.”

During the period in review, Group’s healthcare sector posted revenue of Rs. 13.8 billion during the first half, a significant increase of 19.2% YoY backed by the increased top-line of all business units under the sector. Pharma segment revenue grew by 4.1% YoY and the Medical Devices segment grew by 51.0% YoY driven by both price and volume increase. Revenue of the Retail segment saw a 17.6% YoY increase, fueled by an improved footfall of 14.0% compared to the previous year.

Lina Manufacturing, the pharma manufacturing business of the Group, recorded an impressive revenue growth of 203.5% YoY, mainly driven by higher volumes in the Metered Dose Inhaler (MDI) plant. Group’s Healthcare sector EBIT was Rs. 2.1 billion. 

The consumer sector, which includes both export and domestic business, reported a 13.2% YoY increase in revenue to close at Rs. 9.7 billion in 1HFY24. Consumer local business showcased strong performance in 1HFY24 with Group’s consumer brands continued to grow market shares. Combined Tea category experienced a volume growth of 11.5% YoY and a value growth of 84.4% YoY. The confectionery segment revenue declined by 13.8% YoY, despite an increase in price, due to a volume contraction of 26.8% YoY. PAT from the Consumer segment increased by 32.5% YoY due to the growth in local business. 

The agribusiness sector of the Group, represented by Watawala Plantations PLC (CSE: WATA), reported a revenue of Rs. 4.6 billion, up by 0.4% YoY. The revenue growth was driven by the increase in palm oil volumes despite the dip in prices in line with the drop in global commodity prices. The PAT of the Agri sector closed at Rs. 1.7 billion for 1HFY24, down by 15%. YoY Dairy business revenue grew by 37.8% YoY due to increases in both sales volume and milk price.