Hemas Holdings PLC reported a notable rebound in consumer confidence during its Q1 FY 2024/25 earnings call, driven by easing macroeconomic indicators and strategic business initiatives.
The conglomerate highlighted the stable exchange rate and over 11% reduction in AWPLR as a huge boost to business growth.
Group Chief Financial Officer Moiz Rehmanjee (PICTURED) said, “interest rates and inflation continue to be low, and commodity prices are tapering off.” He was speaking August 1 at the Hemas Quarterly investor webinar following the release of Q1 results.
Specifically, the Weighted Average Prime Lending Rate (WAPLR) dropped to around 8.5%, while inflation remained below 4%. “This favorable environment helped mitigate some of the pressures faced by Hemas, despite a revenue drop of 12.5% to Rs 25.5 billion.”
Despite the revenue decline, Hemas managed to sustain and even improve its profit margins across various levels of the profit and loss statement.
Hemas Consumer Brands Managing Director Sabrina Esufally (PICTURED) said, “We have seen consumer confidence pick up over the last few months, largely due to easing macroeconomic indicators,”.
The personal care segment, which constitutes 55% of Hemas’ business, remained resilient. Strategic price reductions in personal wash and laundry care portfolios helped stabilize market share, despite increased competition from low-cost and low-quality players.
Esufally emphasized the importance of catering to evolving consumer needs, particularly among Gen Z consumers with increasing disposable incomes.
Hemas plans to double its innovation to sales ratio over the next few quarters. New product developments and a strong local presence, especially in Bangladesh, are pivotal to this strategy. Bangladesh, despite facing high inflation and socio-political unrest, continues to be a strategic market for Hemas, showing double-digit growth in Q1.
Looking forward, Hemas aims to enhance its market position through strategic initiatives. These include driving digital transformation, optimizing working capital, and expanding product offerings tailored to local consumer needs.
Hemas Holdings PLC’s Q1 FY 2024/25 earnings call showcased a company navigating economic challenges with strategic acumen. While revenue and EPS saw declines, the improved macroeconomic environment and focused business strategies indicate a promising outlook.
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