In the backdrop of a stable domestic economy, Hemas Holdings PLC (HHL) has demonstrated consistent performance in the first nine months of the financial year 2023/24, with cumulative revenue growth of 10.3 percent amounting to Rs. 90.2 billion. Kasturi C. Wilson, Group Chief Executive Officer, highlighted this achievement in her Financial Year 2023/24 First Nine Months Performance report.

Operating profits for the period reflected the revenue growth, reaching Rs. 8.8 billion, while earnings experienced a notable 41.2 percent increase, totaling Rs. 4.5 billion. Despite marginal growth in group revenue during the quarter, standing at Rs. 31.2 billion, the Learning Segment’s strong contribution and efficiency improvement initiatives led to a 19.6 percent increase in operating profit and a remarkable 126.6 percent growth in earnings.

In terms of the operating environment, Sri Lanka witnessed positive economic shifts, including a 1.6 percent GDP growth in the third quarter, stable exchange rates, and improvements in the external sector, such as rising tourist arrivals and a better Current Account balance. However, consumer spending remained low due to inflationary pressure, although September 2023 marked a historic low in inflation growth.

Within the Consumer Brands Sector, there was a surge in demand during the festive season, albeit below anticipated levels due to decreased purchasing power. Modern trade channels saw higher offtake compared to general trade channels, with prices stabilizing gradually. The stationery industry, influenced by seasonal stocking and competitive pricing amidst inflationary pressures, witnessed intense competition across all segments.

The economic challenges in Bangladesh, exacerbated by inflation and political turmoil surrounding the parliamentary election, impacted the Consumer Brands Sector. Nevertheless, the sector achieved a cumulative revenue growth of 17.1 percent to reach Rs. 38.0 billion, driven by improved product mix, cost-saving initiatives, and lower finance costs. Quarterly revenue growth reached 13.2 percent, with operating profits growing by 73.8 percent, primarily due to improved performance in the Home and Personal Care Business.

In the Home and Personal Care segment, strategic focus on the personal care segment led to market share growth and volume-led growth for key categories. The Learning Segment, leveraging seasonal offtake, sustained its market-leading position, expanding market share in premium and value-for-money segments.

Consumer Brands International saw marginal market share growth in the value-added hair oil segment, with significant contributions from recent launches in value-for-money verticals. ‘Atlas’ maintained its focus on the East African market, while increased Middle Eastern focus led to repeat orders for ‘Kumarika,’ driving notable revenue from the export segment.

In the Healthcare Sector, despite challenges like drug shortages and migration of healthcare workers, revenue grew by 6.1 percent to Rs. 50.9 billion. However, operating profit declined by 4.2 percent due to one-off adverse impacts, resulting in a 6.8 percent decrease in earnings.

The Mobility Sector faced challenges in both domestic and international spaces, despite a marginal recovery in merchandise exports and growth in total throughput at the Port of Colombo. The sector’s cumulative revenue declined, with operating profit and earnings posting a decline of over 35 percent.

Hemas celebrated 75 years of enriching Sri Lankan families’ lives by investing in the country’s future through initiatives like Hemas x Hatch Slingshot, Lanka Sathosa eco-bag initiative, and partnerships focused on child safety and healthcare education.

Looking ahead, amidst ongoing economic challenges, Hemas remains confident in its ability to navigate headwinds and sustain resilience. The Group will continue its consumer-centric approach, focusing on organic and inorganic growth within core areas, fostering a culture that empowers employees, and collaborating with business partners for long-term value creation. As Kasturi C. Wilson’s tenure concludes, she expresses gratitude to the Hemas team and the Board for their support, expressing confidence in the team’s ability to drive continued success.