Sunshine Holdings records 59% top-line growth in 1Q despite macro challenges

Monday, 8 August 2022 00:28 - - {{hitsCtrl.values.hits}}

Sunshine Holdings Chairman Amal Cabraal

Diversified Sri Lankan conglomerate Sunshine Holdings PLC said it continued to demonstrate resilience amidst prevailing macro-economic conditions, reporting an impressive top-line growth of 59% YoY.

The Group recorded a consolidated revenue of Rs. 11.7 billion during the first quarter of the current financial year (1QFY23) with Profit after tax (PAT) growing 54% to Rs. 1.6 billion.

In a statement Sunshine said the revenue increase was mainly due to significant revenue growth in Healthcare and Agribusiness sectors together with the acquisition of a tea export business to strengthen its Consumer Sector.

The Group’s Healthcare sector emerged as the largest contributor to Sunshine’s top-line, accounting for 50% of total revenue, with Consumer at 33% and Agribusiness 16% of the total revenue.

Sunshine Holdings PLC Chairman Amal Cabraal said: “The challenging macroeconomic conditions have impacted the country’s economy in an unprecedented manner. For businesses in Sri Lanka, facing and overcoming the numerous challenges posed by the ongoing economic crisis has and will be an extreme test of resilience and readiness. However, demonstrating great resolve, resilience and an entrepreneurial spirit, the Sunshine Group has found innovative solutions to overcome the wide and varied challenges. This has enabled the Group to post sound results for the quarter. It is inevitable that the business will continue to face numerous uncertainties in the short to medium term and therefore, all sectors of the Group will have to remain nimble and sharp in responding to the challenges.”

During the period in review, Group’s Healthcare sector posted revenue of Rs. 5.8 billion during the first quarter, a significant increase of 46% YoY backed by the price increases to reflect the depreciation of the rupee, despite volume contraction. Group’s Healthcare sector EBIT for the sector was Rs. 743 million.

Consumer Goods sector reported a 109% YoY increase in revenue to close at Rs. 3.9 billion in 1QFY23. 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 with effect from 1 April.

Excluding the new addition, revenue growth stood at 8%. Gross margins were impacted by the rising cost of raw materials, but EBIT margin has improved by 404 bps compared to the same period last year.

The Agribusiness sector of the Group, represented by Watawala Plantations PLC (WATA), saw a revenue increase of 32% during the first quarter compared to the same period last year. PAT of the Agri sector closed at Rs. 734 million for 1QFY23, up by Rs. 10 million compared to the same period last year. However, EBIT decreased by Rs. 27 million (3% contraction YoY) owing to increased cost of bought crop and reduction in crop volumes - a result of the unavailability of fertiliser for the last two years.