Sri Lanka’s Sunshine Holdings records notable growth in bottom-line performances during 2019/2020
Sri Lanka’s Sunshine Holdings PLC has reportedly recorded a notable growth in bottom-line performances during the year ended 31st March 2020 (FY19/20) fueled by strong growth in its healthcare sector.
During this period, the Group has posted consolidated revenue of Rs. 20.8 billion, delivering a 60% Year-on-Year (YoY) increase in Profits After Tax (PAT), local media reports state.
The Group’s top-line performance has ssen a decline in growth by 8% YoY, mainly due to the sale of the tea plantation business represented by Hatton Plantations PLC during the first quarter as well as the revenue contraction of Group’s consumer goods sector.
The Group’s healthcare and consumer business together have contributed 78% to Sunshine’s top-line, while agribusiness sectors of the Group contributed 18% of the total revenue.
During the month of May 2020, the Group has reportedly boosted its stake in the branded tea company, Watawala Tea Ceylon Limited to 100%, which has effectively increased its exposure to consumers.
The Group has also reduced its interest in oil palm and dairy, by transferring the stake in Watawala Plantations PLC to a new joint venture called Sunshine Wilmar (Pvt) Ltd. The strategic move was in line with the Group’s strategy of taking a significant step in its growth plan while expanding its presence in Sri Lanka’s booming consumer goods sector.
The transaction which had obtained shareholder approval during March 2020, was completed in May due to the closure of the Colombo Stock Exchange due to the Covid 19 lockdown.
Profit after tax (PAT) for the period in review has risen to Rs. 1.8 billion, which includes a one-off gain from the sale of Hatton Plantations PLC, which amounted to Rs. 341 million.
The strong positive results have been carried through to the Group’s Profit After Tax and Minority Interest (PATMI) which have grown by 102.4% YoY to Rs. 1.1 billion. Group’s healthcare and agribusiness sectors were significant contributors to PATMI, accounting for 44% and 34% respectively.
Commenting about the Group’s performance, Sunshine Holdings Group Managing Director, Vish Govindsamy has been quoted as saying in the local media, “The financial year under review experienced two unexpected events – the Easter bombings and the country-wide lockdown due to COVID-19 pandemic – where the combined effect caused tremendous impact on every sector in the economy. The novel coronavirus especially, which is the cause of the most affected economic headwind in history, was a true test for organizations like us to showcase resilience, responsiveness and readiness in such a crisis. However, we are pleased to note that as a Group, we displayed a resilient and entrepreneurial spirit in the face of such difficulties, continuing our valuable contribution to the economy by ensuring undisrupted services to all our stakeholders by maintaining highest standards of safety and convenience.”
“Due to the divestment of Group’s tea plantation business, our agribusiness sector experienced a decline in revenue growth while Group’s consumer goods sector also saw a contraction in revenue due to market disruptions. However, it is noteworthy to mention that our healthcare sector continues to yield strong growth momentum from last due to the Group’s well-articulated strategies to improve quality and internal efficiency,” Govindasamy has added.
OSL take:
The profits recorded by the Sri Lankan conglomerate is indicative of the strength and potential for growth of the country’s economy. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country has increased the island’s business potential in the South Asian region. Foreign businesses/investors looking for opportunities could do so in Sri Lanka.
| Article Code : | VBS/AT/20200608/Z_8 |