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Hemas Holdings Investor Presentation 1H 2013/14

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Hemas Group Turnover for 1st half up by 15%

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Hemas Holdings Investor Presentation 1H 2013/14

  1. 1. HEMAS HOLDINGS PLC Investor Presentation 1H 2013/14
  2. 2. Macro Highlights Economic Growth 12 M T-Bill Rate 13.0% Economic growth increases to 6.8% 11.7% 6.4% 6.8% 6.4% 10.7% 10.6% 6.0% 10.0% 4.8% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Sept 2012 Dec 2012 Exchange Rate Exchange rate hovers around Rs.132/$ 11.4% 132.08 128.82 Sept 2012 Dec 2012 Sources: Department of Census and Statistics, CBSL Oct 2013 Inflation 133.62 131.17 Mar 2013 June 2013 Sept 2013 132.67 9.1% 9.2% 7.5% 128.47 Mar 2013 Interest rates on a decreasing trend 6.8% Jun 2013 Sept 2013 Oct 2013 Sept 2012 Dec 2012 Mar 2013 Jun 2013 6.2% Sept 2013 6.7% Oct 2013 YoY inflation increases to 6.7%
  3. 3. Hemas Group: A Snapshot Sector & Market PER vs Hemas PER Share Price (As at 18.11.2013) : Rs. 32.60 30.0 Market Capitalization : Rs. 16.7Bn 25.0 % of Total Market : 0.73% 20.0 PER : 8.53* 15.0 PBV : 1.31 10.0 No of Shares : 515Mn 5.0 Public Shareholding : 28.72% - * PER based on annualized 1H earnings Jun 2012 Sept 2012 Dec 2012 Mar 2013 Diversified Sector PER Jun 2013 Market PER Sept 2013 Hemas PER
  4. 4. Hemas Group: 1H Performance Highlights 1H 2013/14 31st March 2013 Total Assets 31,315 26,008 20% 42% Net Current Assets 4,103 4,156 -1% 722 36% Shareholders’ Funds 12,849 12,153 6% 45 1901% Capital Employed 23,123 19,339 20% 1H 2013/14 1H 2012/13 Group Turnover 14,889 12,920 15% Operating Profit 1,490 1,052 Group Earnings 984 Cash from Operations 901 Figures are in Rs. Mn % Change Figures are in Rs. Mn 1H 2013/14 EPS* 3.82 2.80 36% Net Assets per Share 24.94 21.24 17% ROE* 16.5% 14.2% ROCE* * Annualized based on 1H results 1H 2012/13 % Change 14.6% 12.9% % Change
  5. 5. Hemas Group: 1H Revenue Rs.Mn 16,000 35% 14,000 30% 25% 12,000 20% 10,000 15% 8,000 10% 6,000 5% 4,000 0% 2,000 -5% 0 -10% 1H 2008/09 1H 2009/10 1H 2010/11 Revenue 1H 2011/12 Growth 1H 2012/13 1H 2013/14 • Group Turnover for 1H 2013 was Rs. 14.9Bn; a growth of 15% • Healthcare, FMCG and Transportation sectors were the main contributors to revenue growth • New acquisitions, J.L Morison and Panasian Power contributed Rs. 862Mn and Rs. 115Mn to Group revenue
  6. 6. Hemas Group: 1H Earnings • Group earnings were Rs. 984Mn for 1H 2013; a growth of 36% Rs.Mn 1,200 100% 80% 1,000 60% 800 40% 600 20% 400 0% 200 -20% 0 -40% 1H 2008/09 1H 2009/10 1H 2010/11 1H Earnings 1H 2011/12 Growth 1H 2012/13 1H 2013/14 • Growth in earnings was led by the capital gain realized on transferring part of our property at Tangalle to a JV with Minor, to build a luxury resort • Startup losses of our new hospital and the hotel closure for refurbishment negatively impacted earnings, while Power, FMCG and Transportation sectors contributed positively • Underlying operating profit and earnings growth, adjusted for one off factors stood at 32.6% and 10.7%, respectively
  7. 7. Earnings Per Share & Return on Equity Shareholders' Funds and ROE EPS and EPS Growth Rs.Mn Rs. 4.50 50% 4.00 40% 3.50 30% 3.00 20% 10,000 2.50 10% 8,000 10.0% 2.00 0% 6,000 8.0% 1.50 -10% 14,000 18.0% 16.0% 12,000 14.0% 12.0% 6.0% 4,000 1.00 -20% 0.50 -30% 2,000 0.00 -40% 0 2008/09 2009/10 2010/11 EPS * 2013/14 is based on annualized 1H earnings 2011/12 EPS Growth 2012/13 2013/14 * 4.0% 2.0% 0.0% 2008/09 2009/10 2010/11 2011/12 Shareholders' Funds 2012/13 ROE 2013/14 *
  8. 8. Hemas Group: Our Portfolio Wellness FMCG Hospitals Pharma JLM Leisure Infrastructure Hotels Transportation Outbound Travel Power
  9. 9. FMCG: Industry Highlights Total FMCG market ~ Rs.133Bn Sales Value Growth% ( MAT Aug 2013 Vs. MAT Aug 2012) (MAT Aug 2013) All Island OTC PRODUCTS, 2% All Island (R) All Island (U) 3.5 1.0 Food & Beverages 1.7 3.2 -1.0 Household Care HOUSEHOL D CARE, 13% 2.6 1.5 2.2 0.1 Personal Care PERSONAL CARE, 22% FMCG-All 5.4 4.7 6.6 • Growth of the total FMCG market is below the rate of inflation FOOD & BEVERAGES, 63% • Personal care grows faster than household care and food & beverage segments • Growth in personal care largely driven by increases in price Source: Nielsen Retail Audit Data for 40 Categories tracked in General Trade, excluding Soft Drinks
  10. 10. Hemas FMCG outperforms market growth Key Statistics 1H 2012/13 Turnover (Rs.Mn) : 4,715 Profit After Tax (Rs.Mn) : 406 • The operating profit of the sector improved by 24% due to favorable input prices Revenue contribution to the Group : 32% PAT Contribution to the Group Rs.Mn : 42% Revenue and PAT • Expiration of the tax holiday resulted in increased tax expenses saddling sector PAT Rs.Mn 5,000 500 4,000 400 3,000 300 2,000 200 1,000 100 0 0 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT • FMCG sector recorded an impressive growth in turnover of 27%, driven by Clogard, Diva detergent powder and Velvet beauty soap • Clogard experienced a notable topline growth for the period and was re-launched as an ‘Anti-cavity Toothpaste’ in September • Velvet soap re-launched during the quarter introducing two new variants, Kohomba and Aloe • Gold cologne was re-launched with the intention of contemporizing the brand
  11. 11. Healthcare: Industry Highlights Healthcare Industry Pharmaceutical Industry • Healthcare industry is expected to reach Rs. 282Bn in 2013 (Source: BMI) • Size of the total private pharmaceutical market is ~ Rs 29Bn (MAT Q2 2013) (Source: IMS) • The total number of private hospital beds is estimated to have risen by 70% to ~ 4,700 beds in the last 7 years (Source: RAM Ratings) • The private pharmaceutical market grew by 6.8% YoY(Source: IMS) Revenue split among leading hospitals based on Q2, 2012/13 financials Hemas, 8% Lanka, 18% Nawaloka, 20 % Asiri, 35% Durdans, 19% • The local pharmaceutical industry has grown at a CAGR of ~ 15% over the past 5 years (Source: The Sunday Leader, 30.10.2013) • Chronic care, cardiovascular and anti-diabetics are expected to be areas of growth over the next few years (Source: www.biospectrumasia.com)
  12. 12. Thalawathugoda, a promising start Key Statistics 1H 2012/13 Turnover (Rs.Mn) Profit After Tax (Rs.Mn) • Sector posted a revenue growth of 29%, driven by the sales volume growth of the Pharmaceutical business : 5,751 : 235 • Pharmaceutical business and Hospitals recorded a revenue growth of 18% and 25%, respectively Revenue contribution to the Group : 39% PAT Contribution to the Group Rs.Mn Revenue and PAT : 24% Rs.Mn 7,000 300 6,000 250 • Hemas Pharmaceuticals reinforced its market leadership with a market share of 18.6% (Source: IMS) 5,000 200 4,000 150 3,000 100 2,000 50 1,000 0 0 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT • Our new hospital, Thalawathugoda experienced a steady pick up in volumes and continues to gain acceptance among the local community • Healthcare sector profits were dampened by the startup losses of the new hospital
  13. 13. JLM Performance driven by Healthcare Key Statistics 1H 2012/13 Turnover (Rs.Mn) : 1,273 Profit After Tax (Rs.Mn) : 80 • Healthcare segment accounted for 51% of the revenue, while Consumer and Agro segments contributed 36% and 13%, respectively Revenue contribution to the Group * : 6% PAT Contribution to the Group * : 7% * Revenue & PAT contribution are based on the post acquisition results Rs.Mn Revenue and PAT • J.L Morison’s revenue marginally dropped to Rs. 1.3Bn; a decline of 6% due to the loss of two agencies Rs.Mn 1,500 100 1,250 80 • Despite the drop in revenue, operating profit and PAT for the period increased by 14% and 22%, respectively 1,000 60 750 40 500 20 250 0 • Healthcare segment enjoyed a healthy 1st first half backed by the strong performance in diagnostics and pharmaceutical manufacturing businesses • Agro segment revenue dropped due to the delay in the monsoons, but is expected to pickup during the 2nd half 0 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT Post acquisition results of JLM are consolidated into FMCG, Healthcare and Other segments
  14. 14. Hemas Group: Our Portfolio Wellness FMCG Hospitals Pharma JLM Leisure Infrastructure Hotels Transportation Outbound Travel Power
  15. 15. Leisure: Industry Highlights Tourist Arrivals 120,000 30% 100,000 25% 80,000 20% 60,000 15% 40,000 10% 20,000 5% - 0% Jan Feb Mar Apr May Jun 2012 2013 Jul Aug Sept Growth Top 10 countries of tourist arrivals Japan U.S.A. China(P.R.) Australia Maldives Middle East France Germany U.K. India Source: SLTDA - Jan-Sept 2013 • Year to date tourist arrivals for the first 9 months of 2013 posted a growth of 15%, over last year • Cumulative earnings from tourism for first 9 months of 2013 was recorded at US$ 883, a growth of 24.2% • A growing demand is portrayed from Indian emerging middle class travel enthusiasts to visit Sri Lanka: Indian arrivals up by 30% during the first 9 months of the year • 'Times of Oman' recommended Sri Lanka as the top Eid Holiday Destination for Omani residents • The Commonwealth Heads of Government Meeting (CHOGM) was a great boost for the city hotels and is expected to create a positive impact for the destination 20,000 40,000 60,000 80,000 100,000 120,000 140,000
  16. 16. Hotels closure drags sector profits Key Statistics 1H 2012/13 Turnover (Rs.Mn) : 452 Profit After Tax (Rs.Mn) : -173 • Despite the shortage of the total room inventory, our hotels recorded occupancy levels in excess of 50% during the off-peak season Revenue contribution to the Group : 3% PAT Contribution to the Group Rs.Mn 700 : -18% Revenue and PAT Rs.Mn 150 600 100 500 50 400 0 300 -50 200 -100 100 -150 0 -200 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT • Leisure sector posted a drop in both revenue and profits during the period due to the closure of Club Hotel Dolphin and Hotel Sigiriya for refurbishment • Hotel Sigiriya was reopened after renovations on 1st August 2013, while Club Hotel Dolphin was opened to guests on 1st November 2013 • Continuous improvements to our web booking engine and several accolades from leading online travel agents have contributed significantly in tapping new markets • Sector looks forward to an exciting winter season with the newly refurbished hotels focused on enriching the customer experience
  17. 17. Hemas Group: Our Portfolio Wellness FMCG Hospitals Pharma JLM Leisure Infrastructure Hotels Transportation Outbound Travel Power
  18. 18. Transportation: Industry Highlights Metric Tonnes Air Cargo Volumes 8,000 14% 12% 6,000 • The second international airport in Mattala is expected to be an opportunity in improving the commercial aviation landscape of Sri Lanka 10% 8% 4,000 6% 4% 2,000 2% 0 0% Apr TEUs May 2012 June 2013 July Aug Sept YoY YTD Growth Source: Sri Lankan Cargo Port of Colombo - Transshipments 300,000 • The second phase is expected to improve the new airport to handle 5Mn passengers and 150,000MT of cargo • The new South Port of Colombo, located mid-way on the east-west sea route commenced operations in August 2013 • The facilities of the new port will make it the only port in South Asia with a deep water terminal for mega container ships 250,000 200,000 150,000 100,000 50,000 Jan Feb Mar 2012 Apr 2013 May June July Source: Port Statistics • These developments will play a significant role in connecting South Asia with the rest of the world supporting the transshipment and logistics services
  19. 19. Aviation and Logistics drive performance Key Statistics 1H 2012/13 Turnover (Rs.Mn) : 685 Profit After Tax (Rs.Mn) : 193 • Performance of the Aviation segment was backed by increased passenger and cargo volumes Revenue contribution to the Group : 5% PAT Contribution to the Group Rs.Mn : 20% Revenue and PAT 800 • Hemas Travels further increased their market share among the top travel agencies Rs.Mn 240 700 200 600 160 500 400 120 300 80 200 40 100 0 0 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT • Transportation sector enjoyed a healthy first half with its revenue growing by 47%, driven by the strong performance of Aviation and Logistics segments • Our crew boat servicing business in Galle successfully completed its first year of operations • Maritime segment results were challenged due to lower transshipment volumes • Logistics segment performed well during the quarter and our fully fledged integrated logistics facility is expected to commence operations in the next quarter
  20. 20. Power: Industry Highlights Energy Generation Mix - 2012 • Maximum electricity demand in Sri Lanka reached 2146.4MW for the year 2012 6% 23% CEB Hydro CEB Thermal - Oil CEB Thermal - Coal IPP Thermal 42% 17% • 158 power plants with total installed capacity of 3323MW was operated to deliver the annual energy demand Renewable 12% Annual Overall Plant Factors 70% 60% 2011 50% 2012 40% • Of the 158 power plants:  25 were CEB owned  11 thermal power plants were operated by Independent Power Producers  122 renewable power plants were operated by Small Power Producers • 18 renewable power plants were commissioned during the year 2012 to strengthen the generation capacity of the country 30% 20% 10% 0% CEB Hydro CEB Thermal - CEB Thermal - CoalIPP Thermal Oil Renewable Source: Generation Performance in Sri Lanka 2012, Public Utilities Commission of Sri Lanka
  21. 21. Hydro power boosts sector profits Key Statistics 1H 2012/13 Turnover (Rs.Mn) Profit After Tax (Rs.Mn) • Power sector revenue dropped by 16% due to the curtailment of thermal power generation imposed by the CEB : 2,645 : 250 Revenue contribution to the Group : 18% PAT Contribution to the Group Rs.Mn • Operating profit and the profit after tax experienced a growth of 101% and 97%, respectively : 26% Revenue and PAT Rs.Mn 3,500 270 3,000 230 2,500 190 2,000 150 1,500 110 1,000 70 500 30 0 -10 1H 2009/10 1H 2010/11 1H 2011/12 1H 2012/13 1H 2013/14 Revenue PAT • Growth in profits were mainly driven by the hydro power plants which enjoyed a higher rainfall in catchment areas • Rath Ganga and Manelwala hydro power plants under Panasian Power helped to boost overall profitability of the sector
  22. 22. Corporate Social Responsibility “Piyawara” “Hemas Green Club” • Several teacher training programs were held during the quarter and the main residential program was held in Hambantota • “Hemas Green Club” was formed as an initiative to protect the environment and create awareness about the nature • A group of 10 bikers from Harley Owners Group (HOG) Dubai Chapter rode cross country to raise awareness among the general public for our pre school project “Piyawara” • The inaugural lecture of the Hemas Green club on “Sustainable Development & Environment” was delivered by veteran environmentalist, Professor Sarath Kotagama • Pre schools built under the “Piyawara” project are being sustained and monitored continuously • The Club initiated a plant nursery in Dankotuwa and distributed plants among the community and Hemas staff members
  23. 23. Taking Hemas to the „Next Level‟ • Mr. Lalith De Mel, Chairman, Hemas Holdings PLC, retired from Office on 6th November 2013 after a service of 11 years • Mr. Husein Esufally took over as the new Chairman of Hemas Holdings PLC and will continue as the Group Chief Executive Officer till 31st March 2014 • Mr. Steven Enderby was appointed to the Board of Directors on 6th November 2013 and was appointed as the Deputy CEO of the Group. He will assume the Office of Group Chief Executive Officer with effect from 1st April 2014 • Mr. Malinga Arsakularatne, the Chief Financial Officer of Hemas Group was appointed to the Hemas Holdings Board on 6th November 2013
  24. 24. Hemas Investor Relations: Telephone: +94 11 4 731 731 Email: ir@hemas.com Web: http://www.hemas.com Hemas Holdings PLC Hemas House, 75, Braybrooke Place, Colombo 2, Sri Lanka

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