Press Release – 9th August 2016

Sunshine Holdings achieves highest-ever revenue and profits for a single quarter in 1Q 2016/17

Diversified Conglomerate concludes 1st Quarter on a high with 30% Profit growth, boosted by turnaround in Agribusiness

9th August 2016: Achieving its highest-ever Group Revenue and Earnings Per Share (EPS) for a single quarter, diversified conglomerate Sunshine Holdings PLC has concluded the first quarter of its 2017 Financial Year (1Q 2016/17) on a high note.

For the quarter ended 30th June 2016, Sunshine Holdings boosted Profit After Tax (PAT) by a significant 30% year-on-year (YoY) to LKR 408 million and increased Group Revenue by 11% YoY to LKR 4.6 billion. The Group also improved Profit to Equity Holders by an impressive 27% YoY to LKR 207 million, as well as its Earnings Per Share (EPS) by 27% YoY to LKR 1.53.

The five sectors in which the diversified conglomerate operate are; Healthcare (Sunshine Healthcare Lanka Ltd. and Healthguard Ltd.), FMCG (Watawala Tea Ceylon Ltd.), Agribusiness (Watawala Plantations PLC), Packaging (Sunshine Packaging Lanka Ltd.) and Renewable Energy (Sunshine Energy Ltd.).

“This strong performance amidst economic and business volatility and challenges – especially in Agribusiness – reflects the solid fundamentals of Sunshine Holdings and its business units,” Group Managing Director (GMD) – Vish Govindasamy said. “The high growth trajectory of Sunshine Holdings is evident in the Group achieving its highest-ever Group Revenue and EPS for a single quarter during the concluded financial period. With the expansion efforts and strategic initiatives which are underway, the Group is well poised for further growth acceleration in the medium to long term.”

Healthcare, the largest sector of the Group, which accounted for 42.4% of Group Turnover for 1Q 2016/17, increased its Revenue by 18% YoY. As a result of having to absorb exchange rate fluctuations (due to price controls on pharmaceuticals) Healthcare PAT however was down 6.1% YoY in 1Q 2016/17.

The FMCG sector Revenue grew 14.4% YoY, with continued growth in the domestic market in which its brands – Zesta, Watawala Tea and Ran Kahata – collectively have over 35% market share. PAT however was adversely affected by pickup in tea prices and the cost of rollout of ‘Zesta Connoisseur’ to Shangri-La properties worldwide.

As a result of a strategic shift towards reducing output of tea to curb losses, Revenue in Agribusiness reduced marginally by 1.6% YoY. Demonstrating the prudence of the strategy and boosted by profits in Palm Oil, PAT for 1Q 2016/17 for the sector improved 82.7% YoY.

Revenue of the Packaging sector was up eight per cent YoY to LKR 102 million while its PAT grew to LKR 8 million. As a result of change in weather patterns, Revenue of the Renewable Energy division reduced 24% YoY to LKR 25 million in 1Q 2016/17, with the sector’s PAT too declining to LKR 7 million as a result.

Expansions are set to continue across the Group with Healthguard – the leading speciality health, wellness and beauty retail chain – set to open two new stores during the second quarter. Sunshine Healthcare is focusing on further strengthening its product portfolio by securing new agencies – particularly in chronic care and wellness. By September, ‘Zesta Connoisseur’ is also expected to be rolled out to all Shangri-La Hotels and Resorts worldwide, as part of an agreement between the exclusive hotel chain and Watawala Tea Ceylon. Sunshine Energy’s second hydro power plant is set to generate revenue from the next quarter as well.

Sunshine Holdings PLC is a diversified holding company contributing to ‘nation building’ by creating value in vital sectors of the Sri Lankan economy – including healthcare, agribusiness, fast moving consumer goods and renewable energy. The group, which provides employment to approximately 12,000, generates over US$ 120 million in revenue. Sunshine Holdings is consistently ranked among the LMD Top 50 companies in Sri Lanka and is also one of the country’s largest tax payers – contributing over Rs. 500 million to the state’s coffers annually.