Weak pharma market hurts Hemas Group profits

The pharmaceuticals business at the Hemas Group faced weak market conditions during the quarter ending June 2014 impacting sales and resulting in low growth, company CEO Steven Enderby said this week.

In his review of the group’s performance of this quarter, he said despite these difficult trading conditions the company retained its industry leadership position with a market share of 21.05 per cent according to industry assessments.

Group consolidated revenue was Rs. 7.3 billion, up 20 per cent, operating profits ended at Rs. 452 million and earnings stood at Rs. 247 million, down 12 per cent. Group post-tax profits fell by 12 per cent against the earlier corresponding quarter. Mr. Enderby said the FMCG sector performed well during the first quarter registering revenues of Rs. 2.9 billion, a strong growth in comparison to last year. “All categories contributed positively. Our Bangladesh operation recorded significant growth on account of the higher sales generated from our hair care segment. The multiple re-launches that took place during 2013/14 financial year have started to deliver results and operating profits have grown in line with sales,” he said in the report.

Healthcare sector registered revenue of Rs. 3 billion, up 9 per cent owing to strong performance of the hospitals. “The revenue growth was driven by the notable performance of our Wattala Hospital along with the improving performance of Thalawathugoda Hospital, which completed its first year in operations during the quarter under review,” he said.

Newest addition, J. L. Morison experienced a 8 per cent drop in sales due to production being disrupted by a machine breakdown, which resulted in the closure of the manufacturing plant for several weeks.

The leisure sector posted revenue of Rs. 515 million, up 34 per cent over the last year. Revenue growth was driven by the sector’s hotel business which recorded a topline of Rs. 287 million, up 78 per cent from the earlier 2013-14 quarter.

“Hotels enjoyed a healthy occupancy rate of 70 per cent, a significant improvement over the last year,” he said.