Hemas delivers stable FY25 Q1 performance amidst market challenges

Thursday, 1 August 2024 04:06 - - {{hitsCtrl.values.hits}}

Hemas Holdings Acting CEO Ravi Jayasekara

Hemas Holdings PLC yesterday announced that it demonstrated resilience in 1Q of FY25 in a challenging economic environment.

The Group’s consolidated revenue was Rs. 25.5 billion alongside operating profits of Rs. 1.9 billion and earnings of Rs. 0.9 billion. The revenue decrease compared to the previous year was largely due to downward price adjustments and subdued consumer spending, exacerbated by extended holidays in the first two months of the quarter. Despite the revenue dip, the Group’s profitability margins benefited from efficiency improvement initiatives and reduced finance costs.

The Consumer Brands sector reported revenue of Rs. 8.9 billion, with operating profits of Rs. 0.8 billion and earnings of Rs. 0.6 billion. Despite lower revenue, margins improved due to supply chain efficiencies and productivity initiatives.

The quarter saw a successful emphasis on personal care, with notable market presence in Baby and Feminine Hygiene segments. Innovations included the launch of Baby Cheramy Liquid Soap and new variants of Goya Soap. ‘Atlas’ maintained its market leadership, expanding its share in both the premium and value-for-money segments. ‘Kumarika’ increased its market share in the VAHO market, driven by new value-for-money and pure coconut oil products, while ‘Actisef’ continued to be an essential part of the portfolio.

The Healthcare Sector performance delivered revenue of Rs. 16.0 billion, with operating profit of Rs. 1.3 billion and earnings of Rs. 0.8 billion. Profitability increased due to overhead optimisation, improved working capital management, and lower interest rates.

In addition, the sector sustained its market-leading position despite market contraction and regulatory price reductions. Focused efforts on cost optimisation, efficiency improvements, and effective working capital management enhanced profitability. The Healthcare segment also witnessed increased inpatient and outpatient volumes due to more surgeries and medical screenings.

The Mobility Sector’s revenue grew 14% to Rs. 475.9 million, driven by maritime volume growth. Operating profit and earnings both more than doubled, reaching Rs. 455.3 million and Rs. 269.7 million respectively.

The segment’s performance improved with higher freight rates and volume growth, while the Aviation vertical benefited from improved yield and higher cargo volumes, despite intense competition affecting the passenger segment.

Hemas continued its commitment to the environmental, social and governance agenda, focusing on plastic waste offset, water usage reduction, and increased renewable energy use. Partnerships, such as with Eco Spindles, have been pivotal, with over 720,000 kg of plastic collected to date. The Group’s social initiatives positively impacted over 56,800 families, including professional training for educators and the opening of the 66th Piyawara pre-school, supporting underserved communities.

Looking ahead, Hemas is committed to expanding its footprint domestically and globally, executing strategic priorities from its Long-Range Plan, and maintaining strong liquidity and efficient resource allocation. The Group continues to drive operational transformation across all business segments, aiming for sustained growth amidst ongoing market challenges.