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Hemas push into Sri Lanka hospital sector; Group earnings hit by taxes
Wednesday, 13 June 2007 - 5:38 AM SL Time
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The Hemas group is pushing into the hospital sector with a 2.5 billion rupee investment though bottom line growth this year has been hit by a higher taxs, officials said.
The group`s 100 bed hospital in Wattala, off Colombo, is expected to be operational by August 2008, while a newly acquired hospital in Galle is being upgraded to 50 beds with operating theatres and intensive care facilities.
`Hospitals in one sector Hemas will move into in a big way in the years to come,` Chief Executive Hussein Esufally said.
The group was also planning another 50 bed hospital, probably in Kurunegala as part of its hospitals strategy with Columbia Asia which will give the group 200 beds in the next five years.
`The hospital in Galle will not have the same facilities as the one in Wattala but it will be a secondary care facility which will be the best in Galle,` Esufally said.
Though about 400 patients walk into the hospital mainly for channeling, the hospital was not optimizing its lab or pharmacy.
The hospital currently a 20 bed facility was located in a 40 perch block, but Hemas has acquired 100 perches next to it, where a new facility would be built.
In the year to March 2007, Hemas group posted consolidated profits of 1,005 million rupees up from 958 million but 163 million came from property revaluations brought into the profit and loss account under new fair value rules.
Last year only 22 million rupees came from fair value rules.
However group revenues were up 20 percent to 11.7 billion from 9.7 billion rupees.
Income tax rose to 387 million, from 281 million rupees, but the effective tax rate is expected to fall next year with a new production facility in the consumer goods sector starting production, which has tax ? relief.
Esufally says a pilot marketing effort in Pakistan has been `heartening` and an intensified export drive is planned for that market and Bangladesh. India, he says has heavy competition.
Meanwhile discussions with Maliban, a biscuit maker, to form a partnership was still on.
The power sector continued to do well, bringing in 303 million rupees (262 in 2006) in profits, second only to consumer goods which brought in 399 million (408 million in 2006).
The leisure sector was hit by the conflict but its inbound tour unit was looking at starting an office in India. Re-branding of Serendib hotels with the Minor group of Thailand was on hold, though the foreign partner has acquired a 20 percent stake.
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