ECONOMYNEXT – Sri Lanka’s Hemas Holdings made a loss of 426 million rupees in the June 2019 quarter compared with profits of 554 million rupees a year ago as consumer demand fell after April’s suicide bombings and subsequent communal violence.
But a recovery in group businesses was under way, Hemas Holdings chief executive Steven Enderby told shareholders in a note accompanying interim accounts filed with the Colombo stock exchange.
Hemas Holdings posted a 71 cents loss per share for the June quarter. The share was trading at 77.50 rupees, down 40 cents or 0.5 percent in early trade Friday.
Group sales fell 2.3 percent to 13.2 billion rupees in the June 2019 quarter from a year ago.
Enderby said the fall in June quarter sales was mainly a result of the terrorist attacks of 21st April, “with the aftermath causing economic slowdown and difficult trading conditions.”
More than 250 people were killed in bombings of churches and hotels by Islamist extremists and subsequent violence against minority Muslims also affected business.
Enderby said the Hemas group leisure and travel business incurred a loss of 129 million rupees with the generally depressed economic environment also weakening performance across the group in particular at Morisons and N*able subsidiaries.
“We were also impacted by a number of one-offs totaling 130 million rupees including a charge from the adoption of SLFRS 16,” Enderby said, referring to a new accounting rule that brings leases hitherto held off-balance sheet, on-balance sheet.
Hemas group consumer sales were also affected by “baseless ethnically divisive attacks on our business and brands,” Enderby said, referring to a campaign by extremists to boycott Muslim-owned businesses.
“Many of these attacks appear designed to mislead the public and exacerbate already strained communal relationships,” he said.
“We continue our efforts to ensure everyone understands that building great Sri Lankan consumer and healthcare brands and services is an important component of the national economy generating employment and taxes, developing great suppliers and sales and distribution teams across the country, and ultimately driving the livelihoods of thousands of families.
”As our teams across the group work to ensure this message is understood, we are seeing a steady recovery in the performance of our consumer businesses from the lows of May,” Enderby said.
“There is ongoing improvement into Q2 as we push hard to return to normal business levels as quickly as possible.”
(COLOMBO, 09 August, 2019)