Hemas Holdings PLC sustains nearly flat revenue in Q1 FY27 despite rising costs, with a focus on margin recovery and strategic business segmentation amid global and local economic pressures.
Hemas Holdings PLC held revenue broadly steady in the first quarter of FY27 even as costs climbed, underscoring how external pressure is continuing to weigh on profitability across its consumer, healthcare and mobility businesses. The company said revenue rose 0.9% year on year to Rs. 28.77 billion, supported by gains in Consumer Brands, Hospitals and Mobility, while gross profit margin improved to 30.4% on the back of pricing actions and a better product mix. Yet the tougher operating environment meant earnings did not keep pace: EBITDA fell 14.1% to Rs. 2.3 billion and group earnings dropped 21.4% to Rs. 937 million.
Management pointed to a combination of factors behind the margin squeeze. The escalation of conflict in the Middle East pushed up global fuel, freight and raw material costs, while a weaker Sri Lankan rupee and higher inflation added to the burden on operating expenses. Hemas said supply continuity was maintained throughout the quarter, but at a higher cost, and its immediate priority is to recover pricing discipline and margins without sacrificing volumes. The company also said it will keep investing in productivity measures while pursuing longer-term growth through adjacency expansion, entry into new sectors in Sri Lanka, overseas revenue growth and further spending on people and digital capabilities.
The quarter also marked a change in how Hemas reports its business. According to the company, segment reporting will now be split into Consumer Brands, Life Sciences, Hospitals, Mobility and Strategic Investments, with the former Healthcare division divided into Hospitals and Life Sciences to better reflect how those businesses are run. In Consumer Brands, revenue rose 5.9% to Rs. 9.09 billion, helped by Beauty and Baby Care, although margins were affected by the timing of cost pass-through. Life Sciences revenue fell 3.8% to Rs. 16.11 billion as regulated drug pricing meant the company had to absorb higher costs until price increases are approved by the National Medicines Regulatory Authority.
Other divisions provided some balance. Hospitals revenue increased 11% to Rs. 2.99 billion, helped by stronger admissions and an 84% jump in Cath Lab volumes, though a softer patient mix trimmed margins. Mobility delivered the sharpest earnings improvement, with revenue up 17.8% to Rs. 583 million and earnings more than doubling on higher yields from maritime and aviation operations. Hemas said expected price revisions in Life Sciences should support a gradual margin recovery in coming quarters, but the near-term focus remains on cost recovery, volume protection and operational efficiency.
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