Resilience from Hemas in Q2 2023/24 performance
Hemas Holdings PLC (HHL) has posted a cumulative group revenue of Rs. 59 billion in the first six months of 2023/24, a 13.5 per cent growth over previous year. Amidst the increasing strain on operating expenses, the group's operating profit and earnings for the period experienced a marginal growth of 4.1 per cent and 3.7 per cent, reaching Rs. 4.9 billion and Rs. 2.3 billion, respectively.
During the quarter, the group achieved a 10 per cent growth in revenue, posting Rs. 29.8 billion for the quarter, with operating profits and earnings for the quarter increasing to Rs. 2.8 billion and Rs. 1.2 billion, respectively, company CEO Kasturi C. Wilson said in her review.
In comparison to the previous year, Sri Lanka's economic landscape has shown some developments. There has been a significant reduction in inflation with September closing at 0.8 per cent growth on a year-onyear basis although being on an inflated base. Amidst ongoing pressure on the external sector, the exchange rate remained fairly steady throughout the quarter, and interest rates experienced a substantial decline of over 120 percentage points, reducing the burden associated with financing costs.
“Contrary to anticipations, the market's consumer performance during the quarter fell short of expectations. Many key product categories experienced volume contractions on a year-onyear basis, while consumption was stagnant compared to the previous quarter. The heightened utility prices had a pronounced effect on consumer spending, affecting the offtake in both modern and general trade channels. This situation was exacerbated by adverse weather conditions, which further impacted consumer income and foot fall to outlets. The stationery market continued to become increasingly competitive, with all market participants gaining ground through improved range availability and aggressive price competition. Amidst the increasing pressure on consumer spending power, the market witnessed many new entrants in the valuefor-money segments where a high traction was observed,” she said.
The cumulative revenue reported for the Consumer Brands Sector witnessed a growth of 19.9 per cent to reach Rs. 22.6 billion while the operating profits reported a growth of 37 per cent due to reduced raw material prices, improved productivity and stable exchange rates.