Hemas Sustains Q1 Revenue Amid Market Volatility; Sharpens Focus on Margin Recovery
Hemas delivered revenue growth of 0.9% YoY to Rs. 28.77 Bn in Q1 FY27, supported by growth in Consumer Brands, Hospitals and Mobility. Gross profit margin improved to 30.4%, demonstrating the benefits of pricing actions and portfolio mix improvements.
The escalation of conflict in the Middle East led to rising global fuel, freight and raw material costs. At the same time, the Sri Lankan Rupee weakened and inflation increased, driving up operating expenses across many of our businesses. Profitability was impacted by this sharp rise in costs, resulting in EBITDA declining 14.1% to Rs. 2.3 Bn and Group earnings declining 21.4% to Rs. 937 Mn.
GROUP AT A GLANCE
| REVENUE Rs. 28,771 Mn +0.9% YoY | GP MARGIN 30.4% +0.2 pp YoY | EBITDA Rs. 2,258 Mn (14.1%) YoY | GROUP EARNINGS Rs. 937 Mn (21.4%) YoY | EARNINGS MARGIN 3.3% (0.9 pp) YoY |
Going forward, segmental reporting will be broken down into Consumer Brands, Life Science, Hospitals, Mobility and Strategic Investments. The key change is the split of the former Healthcare segment into Hospitals and Life Sciences, reflecting the fundamental differences between these businesses and how they are managed. This change has been implemented in line with our commitment to improving transparency, giving shareholders a better understanding of the business.
SEGMENT PERFORMANCE
| Consumer Brands Revenue: Rs. 9,090 Mn +5.9% YoY Earning: Rs 468 Mn (28.8%) YoY Beauty & Baby Care led growth; margins pressured by cost pass-through timing. | Life Sciences Revenue: Rs. 16,108 Mn (3.8%) YoY Earning: Rs 644 Mn (21.5%) YoY Regulated pricing lag amid LKR depreciation; NMRA increments to aid recovery ahead. |
| Hospitals Revenue: Rs. 2,987 Mn +11.0% YoY Earning: Rs 251 Mn+4.2% YoY Medical admissions and Cath Lab volumes (+84%) drove growth; patient mix softened margins. | Mobility Revenue: Rs. 583 Mn +17.8% YoY Earning: Rs 320 Mn+116% YoY Earnings more than doubled YoY on higher yields on Maritime & Aviation. |
Within Consumer Brands, Beauty and Baby Care delivered strong double-digit growth, with Beauty crossing 20% year on year, though margins were pressured as cost increases were only selectively passed through to protect volumes. In Bangladesh, overall revenue grew 5.2% YoY, driven by strong volume growth in the Male Grooming and Personal Wash categories. In learning, all key categories grew YoY, and we continue to command market share above 50% across the board, with Colour Pencils leading decisively at over 70% and our core Books category holding strongly above 55%. In Life Sciences, as regulated pharmaceutical pricing meant cost increases had to be absorbed until NMRA approved higher prices. Expected price revisions are to support a gradual margin recovery in the coming quarters. Hospitals delivered 11.0% revenue growth, led by higher medical admissions and a 84% rise in Cath Lab volumes, although a shift in patient mix modestly softened margins. Mobility earnings more than doubled year on year, largely on the back of higher yields.
Supply continuity was maintained throughout the quarter, albeit at a higher cost. Management’s immediate priorities are to restore cost recovery and margins in Consumer Brands and Life Sciences, protect volumes through calibrated pricing, and accelerate productivity initiatives, while continuing to execute the Group’s long-term growth priorities; adjacency growth, a new sector entry in Sri Lanka, international revenue expansion, and continued investment in human capital and digital capabilities.