Hemas Holdings PLC reported a cumulative revenue of Rs. 54.4 billion, with operating profits of Rs. 5.0 billion and earnings of Rs. 2.5 billion. The decrease in revenues compared to the same period last year was the result of prudent consumer spending, accompanied by some strategic downward price adjustments, particularly in the Consumer Brands segment.

However, the Group’s continued commitment to improving efficiency, together with favorable exchange rate movements, contributed to increased profitability margins. In addition, initiatives aimed at optimizing working capital, combined with the benefits of a declining interest rate environment, led to a further reduction in finance costs, thereby boosting earnings.

The country’s GDP grew by 4.7 percent, while the local currency proved resilient, appreciating against the US dollar at 299.36. Moreover, the average weighted lending rate (AWPLR) ended at 9.3%. The Consumer Price Index in Colombo registered a deflation of 0.5%, mainly due to the easing of food inflation. However, despite these positive indicators, people have faced considerable pressure on their purchasing power due to high direct and indirect taxes, leading to continued affordability challenges.

Consumer brands

During the quarter, strengthening domestic currency and lower global commodity prices led to aggressive pricing and promotion strategies among industry players, intensifying competition in key categories. A strong focus on value for money (VFM) options continues, reflecting current constraints on purchasing power.

The stationery market has seen increased competition as new brands continue to emerge. This influx has led some players to cut prices, often at the cost of compromising quality. As consumers navigate this landscape, their focus remains firmly on affordability, leading to a gradual shift in their purchasing habits. More specifically, there is a noticeable trend towards VFM offerings as consumers look for products that offer both quality and value for money.

The consumer brands sector reported a cumulative revenue of Rs. 19.9 billion while operating profit and earnings Rs. 2.5 billion and Rs. 1.8 billion for that year.

The sector reported a revenue of Rs. 11.0 billion for the quarter, while operating profit and earnings rose to Rs. 1.7 billion and Rs 1.2 billion, respectively, due to improved profitability margins compared to last year. Despite the decline in revenue compared to the same period last year, a combination of margin improvement and cost rationalization initiatives led to overall business growth.

Home and personal care

Although overall industry demand declined, the company saw improvements in overall market share, consumer reach and product availability in the quarter. Increased focus on personal care and beauty, along with efficiency improvements and supply chain optimizations have led to increased profitability margins.

While competitive pricing and promotions were introduced in key categories, new product launches gained positive momentum, increasing brand visibility and consumer engagement. This quarter marked the successful relaunch of Vivya, strengthening the brand’s presence in the market.