Sunshine Holdings reports strong results in FY16

Diversified conglomerate Sunshine Holdings PLC has posted profit after tax (PAT) of Rs. 1,218 million, a 16.3% improvement year-on-year (YoY).

Net Asset Value per Share increased to Rs. 42.78 as at end of FY16, compared to Rs. 39.24 at the beginning of the year (FY15). Earnings per Share (EPS) too improved to Rs. 4.34 in FY16 from Rs. 3.62 in FY15.

Despite challenges, particularly in the Agribusiness sector, Consolidated Revenue was up by 6.7% YoY to Rs. 17,422 million. Three of the five divisions - Healthcare, Fast-Moving Consumer Goods (FMCG) and Packaging - reported double digit growth in revenue while the Renewable Energy division too improved its revenue. The Agribusiness sector enhanced its PAT despite a reduction in the top-line - as part of a strategic move to reduce volumes and further enhance focus on quality in the Tea sub segment.

Healthcare, represented by Sunshine Holdings' fully-owned subsidiary and one of the country's largest distributors in the healthcare space - Sunshine Healthcare Lanka Limited (SHL) - was the main contributor to group revenue in FY16 (accounting for 41.1% of the total).

It expanded well above the growth of the overall market. Revenue was up by 17.9% YoY to Rs. 7,161 million in FY16 while PAT was Rs. 327 million, an improvement of 41.2% YoY.

The FMCG sector, represented by Watawala Tea Ceylon Limited (WTC), the country's largest branded tea company, reported a revenue of Rs. 3,440 million for FY16, a growth of 18.0% YoY. This was on the back of price and volume growth, the latter largely driven by Watawala Tea - the country's single largest tea brand. PAT from FMCG grew 7.7% YoY, to Rs. 423 million in FY16.

Agribusiness, represented by Watawala Plantations PLC - the country's largest manufacturer of Palm Oil and one of the largest Regional Plantation Companies (RCPs) - saw its PAT expand to Rs. 518 million, up by 32.5% YoY.

The increase in profitability of the sector, despite severe challenges, was a result of a prudent strategic move by Watawala Plantations to cut down on its output of tea (which translated into reduction in revenue), and to curtail losses by further improving quality.

"Sunshine Holdings takes much pride in this strong financial performance, particularly since it represents bottom line growth across all our business segments, despite significant challenges in some sectors," Group Managing Director, Sunshine Holdings, Vish Govindasamy said.

In FY16 the FMCG segment invested Rs. 88 million on international expansion and the international marketing team will be leveraged to expand the lucrative export business.

Members of the Sunshine Holdings Group have also succeeded in attracting substantial Foreign Direct Investment (FDI) recently to further enhance and expand operations. The Group set up a commercial dairy operation in March 2016 - Watawala Dairy Ltd., with Duxton Asset Management, with a USD 3 million FDI infusion from the latter.