Sunshine June quarter helped by strong healthcare sector

Diversified conglomerate Sunshine Holdings PLC posted a Rs.162 million net profit for 1Q16, an 11 percent growth year-on-year (YoY), with higher contributions from the healthcare segment while the agribusiness took a turn for the worse.

The group revenue increased 5 percent YoY to Rs.4.18 billion while the cost of sales increased 5 percent YoY to Rs.3.22 billion. Gross profits marginally increased 1 percent YoY to Rs.955.16 million.

Administrative expenses increased 18 percent YoY to Rs.417.99 million and distribution expenses increased 7 percent YoY to 201.94 million while other income rose 50 percent YoY to Rs.63.94 million.

The operating profits however fell 10 percent YoY to Rs.399.18 million.

Finance costs decreased 25 percent to Rs.44.07 million owning to reduced interest rates.

Long and short-term borrowings increased to Rs.1.47 billion from Rs.1.44 billion in 4Q15, while the bank overdraft reduced to Rs.439.78 million from Rs.563.99 million in the same period.

The balance sheet remained stable with assets valued at Rs.15 billion, increasing marginally from Rs.14.61 billion in 4Q15 and the net asset value per share recorded at Rs.40.44.

In major segmental contributions, healthcare revenue increased to Rs.1.66 billion from Rs.1.41 billion YoY through bulk diagnostic sales and a supply glut.

Agriculture revenue decreased to Rs.1.69 billion from Rs.1.88 billion YoY through the general global decline in the tea market, which was partially offset through high volumes of oil palm.

The fast-moving consumer goods (FMCG) revenue increased to Rs.684.64 million from Rs.588.63 million YoY primarily driven by the Watawala tea brand.

In profit contributions, healthcare increased to Rs.85.11 million from Rs.74.46 million YoY and agriculture declined sharply to Rs.130.55 million from Rs.230.92 million YoY.

The FMCG profits increased to Rs.81.88 million from Rs.29.07 million YoY. The spike is attributed to a poor 1Q15 performance due to lower quantities arising from a change in trade compensation as well as a fall in tea prices reducing the input costs for Watawala Tea.

However, contributions to the group in 1Q16 from agriculture and FMCG were far below those levels due to share structures in the subsidiaries.

In other segments, the packaging revenue increased to Rs.94.78 million from Rs.83.53 million YoY and the profits increased to Rs.5.7 million from Rs.390,869 YoY.

The investments revenue increased to Rs.46.14 million from Rs.17.81 million YoY and the profits increased to Rs.36.82 million from Rs.31.31 million YoY.

The group expects the current trends to continue in 2Q16.