Sunshine overcomes ‘new normal’ challenges to up 2Q revenue by 16%
Recording another quarter of sound financial performance in a pandemic-affected economic backdrop, diversified conglomerate Sunshine Holdings (CSE: SUN) posted consolidated revenue of Rs 11 billion for the six months ending 30 September (1HFY21), an increase of 9.3% YoY compared to the corresponding period of last year.
Profit after tax (PAT) for the period in review rose to Rs 1.3 billion, an increase of 34.8% YoY, on the back of the profit arising from the improved performance in the agri-business sector. The PAT margins increased to 11.7% for 1HFY21 from 9.5% in 1HFY20 mainly due to the margin increase in the agri-business sector. Net Asset Value per share also increased to Rs 59.33 as at end 1HFY21, compared to Rs 56.26 at the end of 1HFY20.
The Group’s healthcare business emerged as the largest contributor to Sunshine’s top-line performance, accounting for 53% of total revenue. In comparison, Consumer and Agri-business sectors of the Group contributed 25% and 19% respectively of the total revenue.
During the second quarter of FY 2020/21 (2QFY21), Sunshine Holdings posted a consolidated revenue of Rs 6.2 billion (an increase of 15.7% YoY) with a post-tax profit of Rs 733 million, an increase of 11% YoY compared to the same quarter last year. During 2QFY21, the Group’s Consumer sector acquired 100% shareholding of Daintee Limited to further expand its presence, beyond tea, in the local consumer goods sector.
Sunshine Group’s healthcare segment generated Rs 5.8 billion in turnover during 1HFY21, representing a growth of 10% YoY on the back of volume growth. Medical devices and retail business within healthcare had a challenging time due to lower occupancy rates in hospitals and a significant reduction in store operating hours due to lockdown during the period in review. However, significant improvement was reflected during 2QFY21 for these sub-sectors.
Sunshine’s consumer business, reported a top-line of Rs 2.8 billion in 1HFY20, contracting 0.4% YoY, and accounted for 25% of group revenue for the period. 1HFY21 has been a challenging period for the domestic branded tea business due to subdued consumer spending and retail price reductions.
The Group’s agri-business sector, represented by Watawala Plantations PLC (WATA) and Watawala Dairy Limited (WDL), saw a revenue increase of 17.3% YoY to Rs 2.1 billion. The increase was mainly due to the increase in palm net sale average (NSA) and milk prices. During 2QFY21 the company successfully obtained the world-renowned RSPO certification (Roundtable on Sustainable Palm Oil) - a global standard for sustainable palm oil, effective September 2020. The RSPO certification is an assurance to the customer that the standard of palm oil production is sustainable. Palm oil production was at 6.5 million Kg for 1HFY21, down 8% YoY.
Revenue of the Group’s renewable energy business amounted to Rs 209 million in 1HFY21, up 109.4% YoY from Rs 100 million during 1HFY20, as a result of higher rainfall in the catchment areas and optimal operations of all three plants.