Hemas turnover up 20% to Rs. 3.13 b in 1 Q, 2007/08

Hemas Holdings has recorded a turnover of Rs. 3.13 Bn for the first quarter of the financial year reflecting a year on year growth of 20%. Operating margins, however, declined to 12% mainly due to higher input costs at FMCG along with an increase in establishment overheads.

Finance costs for the quarter were Rs. 80.4 Mn, an increase of 26% over the previous quarter, said Director CEO Husein Esufally.

This is due to higher market interest rates along with increased borrowings to fund our investments in Hospitals and relocation of our FMCG factory. For the quarter under review, the effective tax rate decreased to 18% on account of investment relief benefits. As a result a 3% drop in pre-tax profits have been translated into a 6% increase in post tax profits, to Rs. 229.6 Mn.

We saw a slow down in industry growth at FMCG when compared to 2006 with the Personal Care category registering a value growth of 7% during the first five months of 2007. During this period the sector did well to strengthen its overall market share with key brands such as Baby Cheramy, Clogard and Kumarika growing share.

For the quarter under review, turnover grew faster than the market by 22% to Rs. 1,018 Mn although Profits declined by 3% largely on account of higher input costs which were not passed on in full to the consumer.

The sector is focusing on proactive cost management to minimise the impact of the increasing input costs on consumers.