He­mas 2Q net profit down 14% over slow­ing de­mand, higher costs

Daily Mirror (Sri Lanka) - - PROVINCIAL -

Di­ver­si­fied con­glom­er­ate He­mas Hold­ings PLC con­tin­ued to face chal­lenges dur­ing the sec­ond quar­ter of the 2018 fi­nan­cial year (2Q18) ended Septem­ber 2017, with a sharp fall in the bot­tom line com­pared to the same pe­riod last year, at­trib­uted to con­trac­tions across most of the group’s op­er­at­ing seg­ments stem­ming from cost in­creases.

Net profit for 2Q18 fell 14.3 per­cent year-on-year (YOY) to Rs.726 mil­lion, while earn­ings per share fell to Rs.1.27 from Rs.1.48 YOY. The share prices of He­mas re­mained un­changed at Rs.130 at mar­ket close yes­ter­day.

He­mas’ leisure, travel and avi­a­tion seg­ment ran into a net loss of Rs.17.8 mil­lion due to a fall in oc­cu­pancy at group ho­tels, while the con­sumer seg­ment net prof­its fell by 20 per­cent YOY due to a weak­en­ing do­mes­tic mar­ket and higher dis­tri­bu­tion ex­penses, es­pe­cially in the group’s op­er­a­tions in Bangladesh, ac­cord­ing to Bartleet Reli­gare Se­cu­ri­ties (BRS).

BRS said that the health­care seg­ment net prof­its fell in the low sin­gle-digit level due to ru­pee de­pre­ci­a­tion, although the phar­ma­ceu­ti­cals man­u­fac­tur­ing arm reg­is­tered a 7 per­cent YOY growth in earn­ings. The lo­gis­tics and mar­itime seg­ment prof­its in­creased 78.1 per­cent YOY to Rs.148.5 mil­lion.

Group rev­enue ex­panded 8.6 per­cent YOY to Rs.11.7 bil­lion. The health­care seg­ment, which ac­counts for nearly half of the group’s rev­enue, recorded Rs.5.5 bil­lion in sales, in­creas­ing 14.1 per­cent YOY.

Steven En­derby

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