Hemas Achieves Record Earnings for FY 24

-          Revenue grew by 6.7% to Rs. 121.6 Bn driven by the improvements in all key BUs, Despite the volume contractions in all industries across Hemas managed to outperform the market with market share increases in key segments.

·         Home and Personal Care Sri Lanka

o     Increased focus on high margin personal care segment.

o    Value for money offerings

o    Providing innovative solutions and NPDs including

·         Home and personal care International

o    Efforts to increase foot print in key markets East Africa and Middle East.

o    Launched new variants in those markets.

·         Learning Segment had a good back to school season and entered the value for money segment with Homerun

·         Pharmaceuticals – Increased focus on Morison branded generics

·         Hospitals introduced Ambulatory care and focused on improving home care and drove key anchor specialty revenues

-          However, revenue growth was not up to the expected levels due to adverse impact of the macro-economic challenges.

-          Even though the country saw improvements in the external sector and progress was made in the IMF programme, consumer spending remained low.

·         Despite yoy contraction inflation is on an elevated base

·         Changes to the personal income tax laws and VAT laws (from 15%- 18%)

·         Increase in utility prices and fuel costs.

·         Healthcare Sector particularly remained challenged amidst instability and delays in Government regulatory bodies and procurement authorities.

-          However, there are some green lights with interest rates slowing and exchange rates slowing. We expect these positive to result in a demand recovery in the coming quarter.

-          The businesses across the Group engaged in efficiency improvement initiatives.

Allowing breathing space for the businesses to absorb increases in operating overheads.

-          Working Capital optimisation which has been a key priority and this along with interest rate reductions resulted in a significant improvement in finance cost and working capital. Which intern resulted in reduced gearing and over Rs 23.2 Bn growth in operating cashflows.

-          Consequently, the Group reported a 43.1% growth in earnings to report highest ever earnings of Rs. 6.1 Bn for the year

-          Strong Financial position of the Group was verified by the Fitch The reaffirmation of the AAA (lka) Stable Outlook Rating by Fitch Ratings for the fifth consecutive year is a testament to the Group’s resilience and financial strength.

-          We remain cautiously optimistic about the future.

-          Our Strategic priorities to drive organic and inorganic growth,

·         Consumer : Investing in underpenetrated segments like beauty and baby diapers, internationalisation and export footprint.

·         Healthcare : Developing a branded generics portfolio under the brand Morison, driving distribution capabilities, expanding in key anchor specialties, and investing in the transition to a fully-fledged tertiary hospital.

·         Improving the digital infrastructure and fostering a culture of data-driven decision-making will be a priority for all businesses as the

-          Group continues its 75-year-long journey in empowering lives through innovative solutions for the future.