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Healthcare and Consumer propel Sunshine Holdings’ strong FY21 performance



Diversified Sri Lankan conglomerate Sunshine Holdings (CSE: SUN) recorded resilient revenue and profit growth in a pandemic-affected macroeconomic environment, reporting notable top-line and bottom-line performances growth during the year ended 31 March 2021 (FY20/21). Group’s Healthcare and Consumer sectors led growth while healthcare segment remained the major contributor to total Group revenue in FY21.

Sunshine recorded a consolidated Group revenue of Rs.24.3 billion for the year ended 31 March 2021, an increase of 16.6% over last year. Profit after tax (PAT) for the period in review also increased to Rs. 2.5 billion, an increase of 38.5% YoY, and profit margins have also increased to 10.4% compared to last year’s 8.8%. These improved results stem from revenue growth, margin increases in key sectors and strategic measures taken by the group to rationalize operating cost and lower finance expenses.

The Group’s Healthcare business emerged as the largest contributor to Sunshine’s revenue, accounting for 53% of the total, while Consumer Goods and Agri Business sectors of the group contributed 29% and 16% respectively of the total Group revenue. The gross profit closed at Rs. 7.7 billion up 25.2% YoY compared to the previous year, backed by the contribution from the Consumer goods and Agribusiness sectors. The Group EBIT closed at Rs. 3.5 billion, an increase of 21.2% YoY.

Profit after Tax and Minority Interest (PATMI) increased by 32.7% YoY to Rs1.5 billion; the Healthcare sector made the largest contribution to PATMI, accounting for 37% of the total while Agribusiness accounted for 30% of the total. Net Asset Value per share increased to Rs. 23.48 as at end March 2021, compared to LKR 18.75 at the end March 2020.

For increasing exposure to its core sectors, which are defensive in nature, and maintaining a healthy balance sheet, Sunshine Group’s Fitch rating was upwardly revised to ‘AA+(lka)’; Outlook Stable, from ‘A(lka)’ in January 2021 (reaffirmed in March 2021).

Commenting on the performance, Sunshine Holdings Group Managing Director Vish Govindsamy said as a group, Sunshine has been facing challenges in some of their core sectors and will continue to do so in short to medium term due to the negative economic impact due to the COVID-19 pandemic and subsequent lockdowns.

“However, Group’s robust cost management initiatives, process reengineering efforts backed by digital technologies to ensure overall efficiency and business continuity have helped Sunshine to outdo last year’s results and drive strong performance in FY21, where the Group has been able to rebound from the adverse impacts brought by a tough macroeconomic business environment. We are proud that the Group has remained resilient in the face of such difficulties, and we remain optimistic about consolidating our operations to strengthen the overall performance of the Group further. All possible measures have been taken to ensure business sustainability and continuity in the coming months,” Govindasamy commented.

During the period in review, Group’s Healthcare sector grew its revenue by 14.5% YoY to Rs. 12.8 billion. The sector achieved growth in Pharma, Medical Devices and Retail subsectors with significant improvement in second half of the year owing to the recovery from Covid-19 lockdown.

Pharma and Medical Devices sectors achieved the highest per quarter revenue during the last quarter while Healthguard, the retail arm of the Healthcare sector, witnessed an increase in sales in the mid of FY21 which was predominantly driven by the increase in health and wellness consciousness of consumers with the spread of Covid-19 in the country. The Pharma subsector which contributed 66% to Healthcare revenue, grew 14.8% YoY in FY21. Reported PAT for healthcare amounted to Rs.824 million in FY21, up 61.6% YoY at a margin of 6.4%.

Group’s Healthcare sector merged with Akbar Pharmaceuticals in January 2021, making it Sri Lanka’s first fully integrated Healthcare company with the addition of pharma manufacturing and R&D operations. Post-transaction, Sunshine Holdings owns 72% of Sunshine Healthcare Lanka Limited which was previously a fully owned subsidiary, whereas Akbar Brothers Ltd owns the remaining 28% shares.

Spearheaded by brands like ‘Zesta’, ‘Watawala Tea’, ‘Ran Kahata’ and ‘Daintee’, the Consumer sector continued its impressive growth by posting revenues of Rs. 7.1 billion in FY21, an increase of 30.8% YoY and accounted for 29% of group revenue for the period. The revenue growth was predominantly due to the addition of the confectionary business via the acquisition of Daintee during the second quarter. PAT from the Consumer segment increased by 57.2% YoY, to stand at Rs.467 million for FY21. Post-acquisition, Daintee contributed Rs.185 million to the bottom line.

The Group’s agribusiness sector, represented by Watawala Plantations PLC (WATA), saw a revenue increase of 2.5% YoY to Rs. 3.9 billion due to increase in Palm oil net selling average (NSA) and milk prices. Dairy segment, which commenced operations in 2018, made profits in FY21 contributing to 4% of Agribusiness sector PBT. In addition to increase in NSA, profitability of dairy segment was further driven by lean management and rationalization of feed cost, despite increase in commodity prices of key raw materials during 4Q. PAT for Agri sector increased by 120.2% to Rs. 1.6 billion.

In the Agribusiness sector, the dairy business under Watawla Dairy Ltd (WDL) raised US$ 2 million in equity from SBI Japan for an 11% stake in the company in May 2021. The proceeds will be utilized to expand dairy operations and strengthen the balance sheet of WDL.

Revenue for the Renewable Energy division amounted to Rs. 440 million in FY21, up 40.8% YoY from Rs. 313 million during FY20 as a result of favorable weather conditions in the Hydro segment and the expansion of the roof top solar projects. In April 2021, the Group divested its stake in the Mini Hydro Power business, under Waltrim Hydropower (Pvt) Ltd to Aitken Spence PLC with the aim of re-focusing on its core sectors.

In March 2021, Sunshine Foundation for Good— the corporate social responsibility (CSR) arm of Sunshine Holdings, commissioned two Reverse Osmosis (RO) Plants in Galgamuwa in the North Western Province and Medawachchiya in the North Central Province. More than 1,500 students and 5,000 inhabitants in surrounding villages now have access to over 20,000 litres of safe and clean drinking water per day through these newly-launched RO Plants.

The Foundation has commissioned a total of eight RO plants so far in the North Western, North Central, Southern, Central and Uva provinces to date, giving over 20,000 residents in Sella Kataragama, Kataragama, Ambanpola, Handaganawa, Rajanganaya, Galewela, Galgamuwa and Medawachchiya access to clean drinking water.

During the last financial year, Sunshine Holdings also cemented its position as a leading employer in the country after the company secured the coveted certification from The Great Place To Work (GPTW) Institute– recognising Sunshine Healthcare Lanka (Medical Devices and Pharmaceuticals), Watawala Dairy, Sunshine Consumer Lanka, Sunshine Tea and Sunshine Energy. The certification program assessed existing people practices and employee experience within the Group based on the five principals of credibility, respect, fairness, pride and camaraderie. The GPTW Certification was the culmination of thoughtfully crafted human resource practices and values, consistently applied over Sunshine’s 50 years of operations.

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Govt urged to unlock true potential of Sri Lanka’s Blue Economy



=Take initiatives to reap maximum benefit from our seafood resource

=Fisheries sector can quickly generate employment and export earnings

=Modernizing fisheries sector is a collective responsibility of the government

by Sanath Nanayakkare

Championing the Blue Economy is a relatively easy way out for Sri Lanka to generate employment and export earnings as Sri Lanka can hardly become an industrialized nation, Shiran Fernando, President- Canned Fish Manufacturers Association of Sri Lanka. (CFMASL) told the media last week.

“Concerted efforts need to be made to reap long-term benefits of the sustainable use of marine resources to promote economic growth and come out of the current economic crisis. Facilitating extensive fish farming, proper handling/storage, keeping the catch quite fresh for processing would be key in achieving this goal. The whole government should spearhead this endeavor without leaving the task to the Ministry of Fisheries alone. The fisheries ministry is hard put to find funds despite its willingness to help the private sector to take the industry to the next level. There is a role for the government to play in this exercise which the private investors can’t,” he said.

The outspoken entrepreneur said that the fisheries sector is not getting the attention it deserves from the government although the Minister of Fisheries and the Ministry Secretary are passionate about the industry and are supportive of the private sector investors.

“What we say is; it’s the duty of the government to modernize the practices of this industry by helping the fisher folk to completely transform their way of catching fish by enforcing regulations for responsible fishing, guiding them on protecting the marine ecosystem and providing them with modern fishing vessels with refrigeration technology. They still go out to see on old boats and can’t carry enough ice for fish preservation, therefore, a lot of fish is found to be less than perfect and is diverted for making dried fish. The government should invest in and encourage key innovations in fisheries such as modern boats, nets and cooling systems through appropriate financial arrangements or cluster schemes to fully utilize the catch. You may not be able to get everyone on board such projects, so get as many fisher folk as possible to join such schemes and get them to engage in the industry in a sustainable way with a long-term view. As canned fish manufacturers, we have fulfilled the pledge we made a few years ago that we would manufacture enough canned fish to meet the nation’s requirement. Currently 250,000 canned fish are consumed per day in the country. Now 5 factories of our Association produce 300,000 units of canned fish per day exceeding the daily requirement. Although the consumption had dropped in September-October last year, now it has stabilized with prices coming down. We thank the ministry for increasing the Special Commodity levy (SCL) by Rs. 100 on imported canned fish. We don’t ask the government to stop canned fish imports. Let the Sri Lankan consumers eat imported canned fish if they want to pay more. However, when you import the product that can lead to unemployment and underutilization of our seafood resource,” he said.

Fernando insisted on monitoring and regulating of canned fish companies that don’t carry SLS standards to create awareness in consumers and encourage them to buy local canned fish made in compliance with standards.

He said that his company’s (TESS Group of Companies) operations at currently inoperative Oluvil Harbour would begin soon.

“Our operation there will commence with over Rs 20 million spent on refurbishing the cold storage and factory that TESS Group built there long ago. Since this harbor has not been used for 12 years now, the harbor mouth needs re-dredging. If the government intervenes and does the needful, the area will be more viable for commercial fisheries and will create sustainable livelihoods opportunities for people in the area.”

He noted that if the government supports their Association for value added re-exports of canned fish, they can import raw fish and repack it as fillet fish Flounder (used in fish and chip recipes), Salmon fillet, Anchovy fillets etc., and thus supply to the high-end segment of the global market and increase the country’s export earnings.

“Sri Lanka is doing certain things right in the fisheries sector. We are on the right path, but we urge the authorities to pay more attention and adopt strategies to maximize the use of its vast oceanic resources,” he said.

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ComBank upgrades Q+ Payment App to introduce ‘Send Money’ fund transfers facility



The Q+ Payment App, another state-of-the-art product of Commercial Bank of Ceylon, which uses a cutting-edge technology, has scaled new heights in technology-enabled convenience with the addition of several new features that enable different methods of fund transfers and flexible payment scheduling options similar to standing orders.

Customers who have linked their Commercial Bank cards to the Q+ Payment App can now send money to another locally-issued Visa and Mastercard Debit, Credit or Prepaid card, to a Commercial Bank or other local bank account or to any Payment Exchange Name (PEN) through any LankaPay-registered mobile number, directly from their registered cards in the App.

Notably, the Card-to-Card funds transfer feature is the first of its kind to be implemented via a payment application in Sri Lanka and is operated via the ‘Visa Direct’ and ‘Mastercard Send’ card-based fund transfer facilities. This user-friendly, two-step fund transfer method can be executed simply by keying in the card number of the recipient and the desired amount, the Bank said. Similarly, the Card-to-Account feature is equally convenient as the sender is require to select the recipient’s bank and then type the account number and amount to conclude the fund transfer. Q+ Payment App has also enabled a favourites tab to store recipient card and account particulars to perform future transactions even more conveniently.

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Kala Pola 2023 Open-Air Art Fair celebrates 30 years of promoting visual art in Sri Lanka



Kala Pola, Sri Lanka’s annual open-air art fair, will celebrate 30 years of enhancing livelihoods of Sri Lankan artists in an enthralling atmosphere along Ananda Coomaraswamy Mawatha, also known as Green Path, on 19th February 2023. As Sri Lanka’s pioneering and best-known visual art fair inspired by the world-famous outdoor art fairs in Montmartre Paris and the Turl Street Art Festival in Oxford, Kala Pola 2023 will bring together various art enthusiasts from across the Island, creating a vibrant platform for artists to showcase their art to a large and enthusiastic audience.

Conceptualised and launched by the George Keyt Foundation (GKF) in 1993 and nurtured by the unbroken patronage of the John Keells Group since 1994, Kala Pola strives to elevate the visitor experience each year whilst seeking to include more artists and attract more visitors, thereby generating greater income for the artists.

Nadija Tambiah, President Legal, Secretarial and Corporate Social Responsibility at John Keells Group said, “Kala Pola is a primary initiative in John Keells Foundation’s efforts to promote and nurture Sri Lanka’s Arts & Culture.

Through its three-decade existence, Kala Pola has focused on delivering an uncurated, vibrant platform for Sri Lankan artists – whether senior established artists or emerging artists – effectively forming the base of John Keells Group’s roadmap for fostering Sri Lanka’s Arts & Culture.”

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