Sunshine Holdings records 44% top-line growth in 1H amidst macroeconomic challenges

• Consolidated revenue of Rs. 15.8 b
• PAT increased by 91% YOY to Rs. 2.5 b
• Healthcare sector revenue up 48% YOY to Rs. 8.5 b 
• Strong growth in Consumer sector, revenue up 35% to Rs. 3.8 b  
• Agri sector revenue up 60% YOY to Rs. 3.4 b

Recording another quarter of impressive financial performance in a challenging economic backdrop, diversified conglomerate Sunshine Holdings PLC (CSE: SUN) posted consolidated revenue of Rs. 15.8 billion for the six months ending 30 September 2021, an increase of 44% YOY compared to the

Chairman Amal Cabraal

corresponding period of last year. 

Profit After Tax (PAT) for the period in review rose to Rs. 2.5 billion, an increase of 91% YOY, on the back of improved performance in Healthcare and Agribusiness sectors. The gross profit improved by Rs. 1.6 billion, up 44% YOY compared to the same period last year, in line with the Group’s revenue growth. Gross profit margin for the period in review stood at 34%, which is a marginal decrease against the same period last year. Profits attributable to equity shareholders (PATMI) closed at Rs. 1,209 million for 1HFY22.

The Group’s Healthcare business emerged as the largest contributor to its top-line performance, accounting for 54% of total revenue. In comparison, Consumer and Agribusiness sectors of the group contributed 24% and 22% respectively of the total revenue.

Commenting on the performance, Sunshine Holdings PLC Chairman Amal Cabraal said: “As a group, Sunshine has been facing challenges in some of their core sectors and will continue to do so in short to medium-term due to the negative economic impact a result of pandemic-related macroeconomic challenges.”

“However, the Group’s robust cost management initiatives and process reengineering efforts, backed by digital technologies to ensure overall efficiency and business continuity, have helped Sunshine to rebound from the ongoing macroeconomic challenges and record strong performance in 1HFY21.

“We are proud that the Group has remained resilient in the face of such difficulties, and we remain optimistic about consolidating our operations to strengthen the overall performance of the Group further. All possible measures have been taken to ensure business sustainability and continuity in the coming months,” Cabraal commented.

The Group’s Healthcare sector generated Rs. 8.5 billion revenues during 1HFY22, representing a significant growth of 48% YOY on the back of improved performance in Pharmaceuticals Distribution, Manufacturing, Medical Devices and Healthguard Pharmacy. The Healthcare sector PAT increased by 20% YOY. Sunshine Healthcare was also recognised as a Top 40 employer by the Great Place to Work Institute during the quarter. 

The Consumer Brands sector recorded a revenue of Rs. 3.8 billion, a 35% increase in revenue. The sectors’ Tea brands ‘Watawala thei’, ‘Zesta and ‘Ran Kahata’ continue to be market leaders. The revenue increase is mainly driven by the addition of the confectionary business segment via the acquisition of Daintee Ltd. The PAT of the sector decreased by Rs. 19 million (-15% YOY) to Rs. 109 million in comparison to the same period last year. 

The Agribusiness sector, represented by Watawala Plantations PLC (WATA) and Watawala Dairy Limited, saw a revenue increase of 60% YOY to Rs. 3.4 billion. The revenue was driven by the improved performance in the Palm oil segment backed by the growth in palm net sale average (NSA). PAT of the Agri sector closed at Rs. 1.9 billion for 1HFY22, up by Rs. 971 million, while PAT of the Dairy segment marginally increased to Rs. 32 million.

The Group divested its renewable energy business with the initial sale of the hydro-power business in April 2021, and the subsequent sale of the solar power business in September 2021, enabling the Group to refocus on its core sectors.