Hemas shows resilience in Q2 2023/24 with strong performance

Chief Executive Officer’s Review

Hemas Holdings PLC (HHL) delivered resilient results in the first six months of the financial year 2023/24 to post a cumulative Group revenue of Rs. 59.0 billion, a 13.5 per cent growth over previous year. Amidst the increasing strain on operating expenses, the Group’s operating profit and earnings for the period experienced a marginal growth of 4.1 percent and 3.7 percent, reaching Rs. 4.9 billion and Rs. 2.3 billion, respectively.

During the quarter, the Group achieved a 10.0 percent growth in revenue, posting Rs. 29.8 billion for the quarter, with operating profits and earnings for the quarter increasing to Rs. 2.8 billion and Rs. 1.2 billion, respectively.

Operating Environment

In comparison to the previous year, Sri Lanka’s economic landscape has shown some developments. There has been a significant reduction in inflation with September closing at 0.8% growth on a year-on-year basis although being on an inflated base. Amidst ongoing pressure on the external sector, the exchange rate remained fairly steady throughout the quarter, and interest rates experienced a substantial decline of over 120 percentage points, reducing the burden associated with financing costs.

Given the progress made in the domestic debt optimisation efforts and external debt restructuring discussions, the disbursement of the second tranche of the IMF loan is anticipated in the near future.

Nevertheless, Sri Lanka continues to face a multitude of issues, including elevated unemployment rates, constrained disposable income of individuals, and the formidable challenge of managing an extensive debt burden. Consumers, grappling with reduced purchasing power, maintained a cautious approach to their spending patterns.