Sunshine Holdings’ PAT declines to Rs 804 m | Sunday Observer

Sunshine Holdings’ PAT declines to Rs 804 m

Diversified conglomerate Sunshine Holdings PLC (CSE code - SUN) reported top-line performance growth of 5.7% Year on Year (YoY), to Rs.10.9 billion for the six months period ending September 30, 2018.

The top line increase was mainly due to strong performances in the consumer and healthcare sectors and was despite a contraction within the agri-business sector. The company also reported a 23.3% growth in earnings per share (EPS), stemming from the strategic consolidation of its consumer goods sector during the latter part of the 2018 financial year.

Profit after tax (PAT) for the period under review declined by 30% to Rs. 804 million and profit margins have also reduced to 7.4% compared to last year’s 11.1%, mainly due to lower profitability in the agri-business sector and the holding company’s higher finance costs. The group’s healthcare business emerged as the largest contributor to Sunshine’s top-line performance, accounting for 40% of total revenue, while agri-business and consumer goods sectors of the group contributed 32% and 25% respectively to the total revenue.

Profit after Tax and Minority Interest increased by 20.5% Year onYear to Rs. 424 million with the agri-business sector, represented by Watawala Plantation PLC and Hatton Plantations PLC making the largest contribution accounting for 46% of the total. Net Asset Value per share increased to Rs. 52.72.

Group Managing Director of Sunshine Holdings PLC, Vish Govindasamy said, “Our continuous focus on improving quality and internal efficiency through well-placed strategies has yielded strong results for the group, transforming another quarter into a successful one. “Throughout the period, key business sectors of the Group have faced notable challenges but however we are pleased to note that the Sunshine Group continues to display a resilient and entrepreneurial spirit in the face of such difficulties.

“I commend our dynamic team of employees, and our network of business partners and valued customers for their role in driving outstanding performance despite a number of challenges,” Govindasamy said.

The group’s healthcare segment grew by 11.5% Year on Year, generating Rs. 4.4 billion in turnover. The growth was witnessed on the back of volume increase in the pharma sub-sector and footfall growth in retail. Revenue for the current period was negatively impacted by the second round of drug price control which came into effect in September 2018.

The pharma sub-segment which represents 65% of Healthcare revenue grew 8.1% YoY, due to higher sales volumes. Growth in other sub-sectors were- medical devices (+19.4% YoY) and retail (+9.9% YoY).

The Group expects the growth of the medical devices sector to be driven by the recent partnerships with 3M Global Channel Services and Erba Lachema, while newly acquired pharma agencies from Hayleys Consumer division will enhance pharma division’s revenue. Revenue over the next six months will be challenged by the second round of drug price control which came into effect from September 1, 2018,” Govindasamy said.

Sunshine’s Consumer business thrived with an impressive top-line of Rs. 2.8 billion, up 15.8% YoY, on the back of both volume and price growth. It also accounted for 25% of group revenue for the period.