Hemas operating profit up 38.2%

Hemas Group ended the third quarter of 2013-14 on a positive note with a revenue growth of 22.5% to reach Rs 23.7 billion and an operating profit growth of 38.2% to post Rs 2.2 billion. Revenue growth was primarily driven by Healthcare, FMCG and Transportation sectors which grew by 32.4%, 26.8% and 44.6%, while increase in earnings was led by Healthcare, FMCG and power sectors which posted a growth of 23.2%, 6.7% and 29.6%.

The underlying earnings recorded a growth of 18.5% after adjustments for the performance of the Thalawathugoda hospital, closure for refurbishment of Club Hotel Dolphin and Hotel Sigiriya, and the capital gains arising from the transfer of Peace Haven land to a joint-venture with Minor International.

The FMCG sector recorded a revenue of Rs 7.2 billion, a 26.8% growth compared to the previous nine months, while sector operating profits grew 23.8% to Rs. 660 million. The sector's personal care and personal wash categories were the main contributors to growth.

The sector is poised for an eventful quarter, with an active program of re-staging key brands to enhance appeal among consumers.

The Healthcare sector recorded a revenue of Rs 8.8 billion, a growth of 32.4% over the corresponding period of last year, while sector operating profit increased by 25.1% to reach Rs. 741 million.

It was largely driven by the positive performance of the Pharmaceutical distribution business with the new hospital at Thalawathugoda. The Pharmaceuticals business posted a 18.9% growth in revenue, strengthening its market leadership position and increasing its market share to 19.2% (Source: IMS).

The company recently finalised the purchase of a modern 35,000 square foot warehouse on 180 perches of land in Elakanda, Wattala. Located close to the seaport and airport, the warehouse is equipped with all facilities for regulatory compliance including cold storage and temperature controlled environments.

This will further enhance capacity to accommodate future growth. The hospitals at Wattala and Galle experienced a marginal improvement in top line and bottom-line. The new hospital at Thalawathugoda continued to record a steady pick-up in volumes driven by the local community and strengthened by the laboratory and theatre operations at the hospital.

The Leisure sector recorded a revenue of Rs. 891 million and an operating profit of Rs. 53 million for the nine months a 17.7%, and 78.8% decline.

This was primarily due to the closure of Hotel Sigiriya and Club Hotel Dolphin for refurbishment. Club Hotel Dolphin was reopened on November 1, 2013 after extensive refurbishment and has since recorded encouraging occupancy levels of over 80%, while Hotel Sigiriya was reopened earlier this year. During the quarter all four hotels were awarded the 'Travelife Gold' certification.

'Travelife Gold' is an international certification developed by the travel industry to recognise the highest level of commitment of a travel partner towards sustainable travel practices.

Avani Kalutara was bestowed the 'Top Hotel 2014' by Holiday Check, a popular e-travel site. With the availability of the Group's full inventory and encouraging forward bookings, the Group is well positioned to compete with the new properties which are expected to enter the market.

The Transportation sector posted a revenue of Rs. 1.08 billion and an operating profit of Rs 335 million, a growth of 44.6% and 25.1%.

The performance of the sector was largely driven by the aviation, transshipment and the logistics segments. The new integrated logistics arm, Hemas Logistics opened its first container yard at Welisara in November.