Sunshine Holdings records 23.3% increase in EPS as a result of strategic consolidation in Consumer Goods sector

1HFY19 Highlights

  • Consolidated revenue of LKR10.9bn, an increase of 5.7% YoY
  • PAT amounted to LKR804m, down 30.0% YoY
  • Healthcare revenue up 11.5% YoY to LKR 4.4bn
  • Strong growth in Consumer, revenue up 15.8% YoY to LKR2.8bn
  • Agri revenue contracted by 7.9% YoY to LKR3.5bn
  • EPS of LKR 3.02, 23.3% higher than last year
  • Private placement to raise Rs. 775 million with SBI Ven Holdings Ltd

 

2QFY19 Highlights

  • 2nd round of drug price control from 1st September 2018
  • Consolidated revenue of LKR5.3bn, an increase of 3.4% YoY
  • PAT amounted to LKR461m, down 21.7% YoY
  • Healthcare revenue up 7.7% YoY to LKR 2.2bn
  • Strong growth in Consumer, revenue up 10.1% YoY to LKR1.4bn
  • Agri revenue contracted by 8.7% YoY to LKR1.6bn
  • EPS of LKR 1.66, 116.2% higher than last year

 

Colombo, November 08, 2018 – Sunshine Holdings PLC (CSE: SUN) reported a 23.3% growth in EPS for the six months period ending 30 September 2018 (1HFY19), stemming from the strategic consolidation of its consumer goods sector during the latter part of FY18, despite a de-growth in PAT.

Top line indicated a growth of 5.7% to stand at LKR 10.9bn, on the back of strong performance in Consumer goods and Healthcare sectors despite a contraction in Agribusiness revenue.

Healthcare remained as the largest contributor to Group revenue accounting for 40% of the total, whereas Agribusiness contributed 32%, and Consumer goods 25%.

For 1HFY19, PAT amounted to LKR 804m down 30.0% YoY, mainly due to the lower performance of the Agribusiness sector. Profit After Tax & Minority Interest (PATMI) increased by 20.5% YoY to LKR 424m. The Agri sector represented by Watawala Plantation PLC (CSE: WATA) and Hatton Plantations PLC (CSE: HPL) accounted for 46% of PATMI

The PAT margins had reduced to 7.4% from 11.1% mainly due to lower profitability in the agribusiness sector and higher finance cost at the holding company.

Net Asset Value per share increased to LKR 52.72 as at end 1HFY19, compared to LKR 46.74 at end of 1HFY17.

Healthcare revenue for 1HFY19 grew 11.5% YoY, on the back of volume increase in the pharma sub sector and foot fall 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. EBIT margin for 1HFY19 decreased by 80 bps to 5.4% mainly due to currency depreciation.

The Pharma sub-segment which represents 65% of Healthcare revenue grew 8.1% YoY for 1HFY19, due to higher sales volumes. The company’s Pharma segment currently enjoys 12% share of the local private pharma market (IMS data). Growth in other sub-sectors were: Medical devices (+19.4% YoY) and Retail (+9.9% YoY).

Reported PAT for Healthcare amounted to LKR154m in 1HFY19, with a margin of 3.5%.

The Consumer sector reported revenues of LKR 2.8bn in 1HFY19, up 15.8% YoY, on the back of both volume and price growth, and accounted for 25% of group revenue for the period. The domestic branded tea business within Consumer sold 2.1m kg of branded tea, up 3.8% YoY, driven by their largest brand ‘Watawala Tea’, and their budget brand ‘Ran Kahata’.

PAT from the Consumer segment grew by 134.9% YoY, to stand at LKR 236m for 1HFY19. The increase was mainly driven by the lower input costs resulting in a higher gross profit margin.

The Agribusiness sector represented by WATA and HPL saw revenue decline of 7.9% YoY to LKR 3.5bn mainly due to unfavorable weather conditions impacting the tea plantations managed by HPL. Tea volumes contracted by 26.8% YoY resulting a revenue drop of 17.9% YoY due to unfavorable weather conditions. Palm Oil revenue increased by 4.8% YoY due to increase in NSA and a marginal increase in crop.

PAT for 1HFY19 amounted to LKR 453m contracting 39.0% YoY. The reduction was mainly due to the unfavorable weather conditions resulting in lowers yield for the HPL.

Revenue for the Renewable Energy division amounted to LKR197m in 1HFY19, up 89.4% YoY from LKR104m during 1HFY18 as a result of higher rainfall in the catchment areas. The sector made a profit of LKR102m for 1HFY19, compared to a profit of LKR15m in the same period last year.