Hemas Holdings PLC reported resilient financial performance for the nine months ended 31 December 2025, supported by strong growth in its Healthcare and Mobility sectors, despite temporary disruptions from Cyclone Ditwah and selective macroeconomic pressures. The Group recorded a 7.5% increase in cumulative earnings to Rs. 5.9 billion on revenue growth of 9.4% to Rs. 95.8 billion, with Healthcare emerging as the key growth driver during the period.

Full Statement:

Performance review for the Nine Months ended 31 December 2025

Operating Environment

Macroeconomic Environment and Impact on the Group

During the quarter, macroeconomic conditions reflected selective cost pressures alongside areas of stability, with a moderated net impact on the Group’s performance.

The Sri Lankan Rupee depreciated by 2.4%, driven by higher import-related foreign exchange outflows and cyclone-related economic disruption. This created some pressure on imported inputs, particularly in Consumer Brands and Healthcare, which was partially mitigated through pricing actions, procurement discipline and cost optimisation initiatives.

Monetary conditions tightened, with the Average Weighted Prime Lending Rate (AWPLR) rising by 89 basis points to 8.94%. The impact on the Group was contained due to its strong balance sheet, negative net gearing and disciplined funding strategy, limiting the effect on finance costs.

Inflation remained low at 2.1%, helping to contain operating cost escalation and preserve consumer affordability. In parallel, softer global palm oil and crude oil prices provided relief on input and energy costs, partially offsetting currency pressures.

In December 2025, the IMF approved US$ 206 million in emergency financing to support Sri Lanka’s cyclone recovery. Sovereign credit ratings were maintained during the period, supporting overall macro stability and business confidence.

Impact from Cyclone Ditwah

Cyclone Ditwah, which struck Sri Lanka on 25 November, was one of the most severe natural disasters experienced by the country in recent decades. The cyclone resulted in an estimated US$ 4.1 billion in direct economic damage—approximately 4% of national GDP—impacting homes, agriculture, infrastructure and livelihoods, with nearly two million people affected nationwide.

The Group’s manufacturing and service facilities did not sustain any direct physical damage, reflecting the effectiveness of proactive preparedness measures and robust business continuity frameworks across our operations. However, in the affected areas, the broader business ecosystems were significantly disrupted due to damage to personal assets, commercial premises, inventory losses, and disruptions to public transportation & logistics infrastructure, adversely impacting our employees, distributors and retail partners, including pharmacies.

These factors led to temporary supply-chain and distribution disruption during November and December, alongside a short-term deterioration in consumer sentiment. As a result, demand softness was observed during the latter part of the third quarter, particularly within the Consumer Brands and Healthcare sectors. Demand has since stabilised, with encouraging recovery trends evident, entering the fourth quarter.

In parallel, the Group mobilised a coordinated, multi-sector disaster response, working closely with government authorities, community organisations and local stakeholders. The Group committed approximately Rs. 30 million in financial and in-kind humanitarian assistance, focused on immediate relief for vulnerable communities. In addition, the Group has factored in Rs. 200 million for targeted support to small and medium enterprises across our value chain through extended credit terms, stock replenishment and business restoration initiatives.

At a Group level, there is an adverse impact from the cyclone on both revenue and profitability for the third quarter, a portion of which is expected to be recovered in the fourth quarter as operations normalise and deferred demand gets realised.

Overview of the Group Performance

The Group delivered a resilient performance during the period, underpinned by portfolio diversification, balance sheet strength and sustained momentum in Healthcare and Mobility, despite temporary disruptions that affected quarterly comparability.

For the nine months ended December, cumulative earnings increased by 7.5% to Rs. 5.9 billion, supported by revenue growth of 9.4% to Rs. 95.8 billion and a significant reduction in net finance costs. Operating profit was broadly stable at Rs. 9.8 billion, with margin pressures in select Consumer Brands categories offset by robust performance in Healthcare and Mobility, both of which delivered double-digit growth in revenue and earnings. This highlights the increasing contribution and resilience of the Group’s Healthcare and Mobility platforms and diversity of group to withstand such adverse events in the future.

 

On a quarterly basis, revenue grew by 5.3% year-on-year to Rs. 35.0 billion, driven by continued strength in Healthcare and Mobility. However, quarterly earnings declined by 12.8% to Rs. 2.6 billion, reflecting two temporary factors. First, Consumer Brands performance was impacted by a seasonality shift at Atlas, where sales were advanced into earlier quarters compared to the prior year. Second, Cyclone Ditwah disrupted distribution and consumer demand during November and December, particularly within Consumer Brands, resulting in lower volumes during the peak quarter.

 

In addition, quarterly profitability was affected by higher overheads and depreciation arising from recent capacity expansion and capability-building investments especially in the Healthcare sector, which position the Group for medium-term growth but temporarily weigh on near-term earnings.

 

Importantly, these impacts are timing-related rather than structural. Demand conditions have normalised post-cyclone. Volumes are expected to be at pre-Ditwah levels in the fourth quarter across most businesses, and the Group continues to benefit from strong cash generation, negative net gearing and a diversified earnings base.

During the period, the Group commenced a structured, enterprise-wide digital transformation programme focused on standardising core business processes, implementing integrated enterprise systems, and strengthening real-time data and reporting capabilities across the Group. This programme is aimed at improving decision-making speed, operational control and execution consistency across businesses. The initiative is expected to enhance demand planning, working capital management, and supply chain responsiveness, while enabling closer collaboration with distributors, suppliers and other ecosystem partners. Importantly, it establishes a common digital and data backbone for the Group, supporting scalable growth, disciplined capital deployment and the progressive rollout of advanced digital, analytics and automation-led initiatives over time.

During the quarter, the Group strengthened its AI capability-building agenda through the establishment of Hemas AI Labs, a structured platform to develop internal capabilities and incubate use-case-led AI solutions across businesses. In parallel, targeted training programmes were rolled out to equip teams with practical AI tools, aimed at improving decision quality, productivity and speed of execution.

Reflecting strong investor confidence, the Hemas share price increased 68.0% year-on-year, significantly outperforming the broader market. In comparison, the All-Share Price Index (ASPI) and S&P SL Top 20 Index gained 41.9% and 26.6% respectively.

 

Consumer Brands

Nine Months Performance

Cumulative revenue increased marginally to Rs. 36.5 billion, while earnings reached Rs. 4.2 billion. During the period we encountered margin pressure due to the Home Care segment, higher overhead costs earlier in the year, and investments in brand building and capability enhancement.

Quarterly Performance

The sector reported a softer quarterly performance, with revenue declining 9.9% year-on-year to Rs. 14.5 billion. The decline was largely attributable to (i) a timing-led preponement of Learning segment demand into the second quarter following proposed curriculum changes, and (ii) temporary demand and distribution disruptions arising from Cyclone Ditwah.

Despite these factors, several core categories delivered positive underlying volume growth, and demand normalised in December following cyclone-related disruptions, underscoring the resilience of the broader portfolio.

Home & Personal Care – Sri Lanka

Personal Care and Personal Wash categories continued to record positive underlying cumulative volume growth of 4.6%, supported by strong performance in Beauty and Baby Care. Growth in Personal Care was driven by the Vivya and Kumarika brands, while Velvet and Baby Cheramy led growth within Personal Wash. In contrast, the Home Care segment experienced a volume decline during the quarter, reflecting temporary demand softness following the cyclone.

In line with the Group’s innovation-led premiumisation strategy, Diva launched its 3-in-1 ‘Power Pods’, introducing an advanced laundry format to the Sri Lankan market. The Diva ‘Fresh’ range was also relaunched with enhanced formulation, fragrance longevity and refreshed packaging, aimed at strengthening category competitiveness.

Supporting the strategic shift from product-led to solution-led engagement, Baby Cheramy launched Sri Lanka’s first generative AI-powered, tri-lingual diaper advisory platform via WhatsApp, providing real-time, expert-validated guidance to parents and strengthening brand-led consumer engagement.

Fems achieved strong brand equity milestones during the period, being recognised as the “Most Innovative Brand of the Year” at the SLIM Brand Excellence Awards 2025. In addition, Hemas Consumer Brands was named overall winner at the JASTECA Awards 2025, reflecting operational excellence and sustained progress in lean manufacturing and waste reduction.

Consumer Brands - Bangladesh

Despite ongoing macroeconomic challenges in Bangladesh, the international consumer business delivered strong cumulative revenue growth of 18% Year on Year (in BDT terms), driven by volume expansion and pricing actions within the Value-Added Hair Oil category. Kumarika and EVA continued to perform strongly, while new product launches contributed approximately 15% of revenues, supporting portfolio diversification.

Learning

Atlas continues to grow and delivered Cumulative revenue growth ahead of Industry fueled by 12.6% volume growth compared to last year. However Quarterly revenues declined year-on-year due to a timing shift, with a significant portion of demand being realised in the second quarter following anticipated changes to the school curriculum. Atlas completed the rollout of its school bags and water bottles range, supporting its expansion within the “Back to School” segment. The Educational Toys segment continued to scale, supported by an expanding sales network and steady progress in the preschool teacher training programme.

 

Healthcare

Nine Months Performance

The cumulative sector revenues increased by 14.6% to Rs. 57.6 billion, driving growth in operating profits to Rs 4.8 billion and earnings of Rs. 3.2 billion, recording increases of 9.2% and 16.9% respectively.

Quarterly Performance

The Sector posted revenues of Rs. 19.9 billion for the quarter achieving a growth of 19.6%, with operating profits of Rs. 1.7 billion and earnings growth of 19.9% to Rs. 1.1 billion. Higher volumes from the Pharmaceutical segment contributed to the increase in revenue while the Hospital segment saw increased inpatient and outpatient demand.

The National Medicines Regulatory Authority (NMRA) of Sri Lanka has strengthened regulatory oversight affecting pharmaceutical companies and pharmacy operators. Medicine prices continue to be regulated as part of the re-registration and import licence renewal process. In parallel, the NMRA has mandated the continuous on-site presence of a qualified pharmacist in all pharmacies as a condition for licensing and renewal, with stricter enforcement measures in place.

Pharmaceuticals

The Pharmaceutical Distribution business achieved significant year-on-year cumulative revenue growth of 17.8% despite impact from the cyclone in November, which was totally recovered in December. Morison’s own branded products continued to gain market traction, with Empamor - used for treating Type 2 diabetes, leading the market in its category. Morison has successfully secured a further one-year extension to the buyback agreement with the Government.

Hemas Pharmaceuticals continues to be the market leader in the Pharmaceutical Distribution industry segment while in the Pharmaceutical Manufacturing industry segment, Morison has moved up by 19 places during the last 4 years, as per the latest available IQVIA market data.

Hospitals

Increases in both inpatient, outpatient numbers and lab services saw the hospital segment recording strong revenue growth during the quarter delivering cumulative revenue growth of 26% compared to last year. Higher surgical and medical admissions contributed positively to the inpatient revenues while growing channelling and OPD consultations helped to uplift outpatient revenues. New services such as the Cath-lab and the Health Plus OPD facility have contributed to the revenue and earnings growth.

Mobility

Nine Months Performance

The Sector achieved a cumulative revenue of Rs. 1,730.3 million, reflecting a growth of 18.5% which contributed to a 16.4% growth in earnings to Rs. 634.1 million. The revenue growth was backed by healthy volume growth across all the segments.

Quarterly Performance

The quarterly revenue and earnings increased to Rs. 612.4 million and Rs.237.9 million respectively, recording a growth of 18.1% and 42.7% respectively. This performance was supported by the successful introduction of the China–India Express service, which emerged as a key driver of incremental volumes.

The Maritime segment delivered strong cumulative volume growth of 8.7%, with increased throughput across import, export and transshipment operations. In the Aviation segment, passenger numbers continued to improve by 15.2 % during the year, driven by increased frequencies and enhanced marketing efforts, while cargo volumes and yields remained broadly stable, reflecting steady demand conditions.

The Sector will continue to work with its principals to increase frequencies and capacity to capitalise on the expected uptick in volumes.

 

Sustainability

The Group continued to advance its environmental and social priorities in line with its long-term sustainability strategy, strengthening circular economy outcomes, improving resource efficiency, scaling community impact, and reinforcing its position as a purpose led corporate leader.

• Cumulative plastic recovery reached 2.5 million kilograms, reaffirming the Group’s commitment to collect 50% of plastic sent to market by 2025 and 100% by 2030.
• Water intensity increased marginally from 1.3 to 1.5. However, efficiency improvement initiatives remain underway across operations to mitigate resource risk and drive long-term conservation.
• Renewable energy adoption continued to progress, with 10% of total electricity consumption sourced from renewable energy, supporting the Group’s goal to ensure 25% of its energy is from renewable sources.
• The Group delivered meaningful social impact across education, health and wellbeing, and inclusion, reaching over 31,600 individuals during the quarter, reinforcing its commitment to inclusive growth.
• Through the Hemas Outreach Foundation, three new preschools were added, expanding the network to 75 schools. The 75^th pre-school was established in close proximity to Hemas’ Pharmaceutical Manufacturing business in Homagama.

 

Other Major Awards

• Hemas was recognised among Forbes Asia’s 200 Best Under a Billion 2025 companies, selected from over 19,000 mid-sized businesses in the Asia-Pacific region with under US$ 1 billion in revenue that demonstrate consistent growth, innovation, and stability. This is a strong validation of Hemas’ long-term strategy, disciplined growth, and its ability to deliver sustained returns on par with the best in the region.

• Hemas Holdings PLC was recognised by the Ceylon Chamber of Commerce as one of Sri Lanka’s top three corporate citizens at the Best Corporate Citizen Sustainability Awards 2025, reflecting leadership in responsible and ethical business.
• During the period, Hemas Holdings PLC was recognised by the Employers’ Federation of Ceylon (EFC) as one of the Top Ten Best Employers in Sri Lanka for 2025, reflecting the Group’s continued focus on employee-centric practices of building an inclusive, high-performance culture through investments in leadership development, capability building, employee well-being.

Outlook

The Company announced a planned Board transition with long-serving Chairman and former Group CEO Mr. Husein Esufally retiring from the Board on 31 December 2025, following over four decades of service that shaped Hemas into a leading diversified conglomerate in the country. Deputy Chairman Dr. Anura Ekanayake also retired upon completing his term on the same date. From 1 January 2026, Mr. Ajith Fernando, a veteran investment banker and a member of the board since July 2024, assumed the role of Chairman, while Mr. Murtaza Esufally, member of the board and the Chairman of the Healthcare cluster, was appointed as Deputy Chairman, reflecting Hemas’ commitment to balancing continuity with renewal, preserving the Group’s heritage while strengthening its leadership to achieve its growth priorities and deliver superior shareholder value.

Looking ahead, the Group is experiencing an improvement in operating conditions as the economy recovers, supporting improved consumer sentiment and normalisation of demand, which will fuel growth in coming quarters.   In parallel, the Group is in the process of finalising its long-range plan, which will set the strategic agenda and capital allocation priorities for the next five years, with a continued focus on sustainable growth, portfolio resilience and disciplined value creation.

 

Ashish Chandra

Group Chief Executive Officer

February 03, 2026

Colombo

 

Photo Caption : Mr. Ashish Chandra, Group Chief Executive Officer