Group Chief
Executive Officer’s Message

Beyond vertical performance, FY24-25 was a year of strategic renewal and investment. We upgraded digital systems across the Group, including ERP rollouts and expanded cold chain infrastructure in healthcare.

Resilience Reimagined: Building a Future-Ready Diversified Conglomerate

The year under review marked a period of reflection, recalibration, and renewed resilience for Sunshine Holdings PLC. Against the backdrop of a gradually recovering Sri Lankan economy, still contending with structural fragilities, we focused our efforts on strategic execution, operational excellence, and future-readiness. FY24–25 was not simply about weathering post-crisis volatility; it was about reimagining our role in Sri Lanka’s economic recovery and long-term growth story. We ended the year with a consolidated Profit After Tax of Rs. 5.9 Bn.

While macroeconomic volatility persisted, this result demonstrated the resilience of our business model, the clarity of our vision, and the discipline with which we executed our strategy. More importantly, it reaffirmed our ability to create value in complex environments, without compromising the fundamentals of governance, purpose, or sustainability.

This year also marked my first full year as Group CEO. It has been both a personal milestone and a pivotal moment in the evolution of Sunshine. As the next generation family member to lead the Group, I have been deeply mindful of the legacy I inherited a legacy rooted in entrepreneurship, values, and a long-term national vision. At the same time, I have been acutely aware of the new realities that define our operating context: an increasingly digitised world, stakeholder capitalism, and the imperative of agility in the face of geopolitical, economic, and technological change.

Our strong performance this year was the result of thoughtful leadership transitions, investments made over many years, and a deliberate push to deepen resilience across all parts of the Group. We did not merely react to market shifts we acted with conviction, leaned into our strengths, and laid new foundations for scale, stability and synergy.

Our Healthcare business once again led the Group’s performance, contributing over 60 percent of consolidated revenue. Sunshine Healthcare Lanka continued to build on its leadership position as the third-largest pharmaceutical distributor in the country. We grew our presence across hospital and retail segments, despite a challenging policy environment and lingering foreign exchange pressures. Our ability to manage working capital, navigate regulatory ambiguity, and secure key product lines was a defining strength. In tandem, our manufacturing arm, Lina, expanded its production capabilities and launched new respiratory therapies aligned to evolving national healthcare needs. The capacity expansion was not just a technical milestone; it reflected our strategic pivot toward greater self-reliance and innovation in essential drug manufacturing.

One of the most consequential developments during the year was the deepening of our partnership with the International Finance Corporation (IFC), now in its second year. IFC’s 14.7 percent equity stake in Sunshine Healthcare Lanka has brought far more than capital. It has accelerated the digitisation of our supply chain, sharpened our ESG governance frameworks, and opened new doors for regional expansion. With IFC’s strategic guidance and Sunshine’s operational backbone, we are now exploring further expansion of our local manufacturing capability, an ambition that reflects both commercial opportunity and our belief in national healthcare self-sufficiency.

Our Consumer Goods business delivered a steady performance amid subdued consumption, driven by inflationary pressures, VAT changes and evolving consumer behaviour. Our core tea brands Watawala, Zesta and Ran Kahata maintained strong positions in the domestic market, supported by disciplined pricing, brand strength, and consumer trust. On the export front, we recorded double-digit growth, particularly in East Asia and the Gulf. The brand equity built over the past decade is now bearing fruit in new markets, with Zesta finding resonance among global consumers seeking authenticity, provenance and wellness.

The Daintee confectionery business contributed to stability and margin protection, thanks to operational enhancements, automation, and product innovation. We also laid the groundwork for entry into functional food segments, recognising the growing consumer preference for wellness-oriented nutrition. These initiatives are supported by increased digital investments, including the scaling of e-commerce channels and consumer insights platforms steps that will serve competitive advantages in the years to come.

Agribusiness, our third vertical, continued to deliver stable returns despite global commodity headwinds and operational pressures. Our listed subsidiary, Watawala Plantations PLC, posted commendable results in palm oil, underpinned by improved estate productivity, cost optimisation and mechanisation. Sustainability remains central to our palm oil strategy. We maintained our certification under the Roundtable on Sustainable Palm Oil (RSPO), extended compliance with the Rainforest Alliance and scaled up ESG-linked farming practices.

During the year, we also operationalised our cinnamon processing centre, an early but key step in expanding our value-added spice portfolio. This initiative not only diversifies our Agribusiness revenue streams but also strengthens linkages with smallholder farmers. With rising global demand for traceable, sustainable spices, we see significant long-term potential in this segment. While progress has been incremental, we believe that investing in supply chain traceability, farmer engagement, and responsible sourcing will help Sri Lanka capture a larger share of the global spice value chain.

FY24-25 was not simply about weathering post-crisis volatility it was about reimagining our role in Sri Lanka’s economic recovery and long-term growth story. We ended the year with a consolidated Profit After Tax of LKR 5.9 Bn.

Beyond vertical performance, FY24–25 was a year of strategic renewal and investment. We upgraded digital systems across the Group, including ERP rollouts and expanded cold chain infrastructure in healthcare. These investments, while not immediately visible on the income statement, are critical to building the institutional capability needed for our next phase of growth. We also began leveraging synergies across our businesses integrating logistics, consolidating procurement, and sharing technology platforms unlocking new efficiencies and improving response times across operations.

Sustainability remained a central theme throughout the year. At Sunshine, ESG is embedded into how we govern, how we operate, and how we engage stakeholders. This year, we launched the Group’s ESG Strategy 2025, setting out clear goals across carbon reduction, water stewardship, gender inclusion and sustainable sourcing. Our reporting continued to align with the Global Reporting Initiative (GRI) standards, and we began early-stage disclosures in line with SLFRS S1 and S2. We also published our first sustainability assurance report, providing greater transparency and accountability on our impact performance.

In the Healthcare segment, our investment in domestic manufacturing is not only a business imperative; it is a national responsibility. By improving access to affordable, locally made pharmaceuticals, we are contributing to healthcare security and reducing the country’s import dependency. In Consumer Goods, we drive sustainability through ethical sourcing, eco-friendly packaging and waste reduction. In Agribusiness, our initiatives in sustainable palm oil and traceable spices create inclusive value chains while responding to global ESG expectations.

Looking ahead, we remain cautiously optimistic. The macroeconomic recovery is encouraging; reserves have improved; inflation has moderated; and there is some policy stability, though significant risks remain. Structural challenges, including debt overhang, capital market underdevelopment and skill shortages continue to pose headwinds. However, our diversified business model, strong balance sheet, and disciplined capital management give us a defensible base.

Over the next two to three years, our focus will be on three core ambitions. First, we aim to scale our Healthcare business across categories, leveraging our domestic manufacturing capabilities and IFC partnership. Second, we will deepen innovation in our Consumer Goods business, expanding into wellness categories and accelerating digital engagement. Third, we will transform our Agribusiness portfolio into a high-value, ESG-aligned export engine, with a focus on spices, essential oils and traceable commodities. In parallel, we will continue investing in leadership, talent development and digital infrastructure ensuring that we have the capabilities to compete not just today, but tomorrow and beyond. Sunshine Holdings is not just a business; we are partners in national progress. We are deeply entwined with Sri Lanka’s economic journey, from recovery to resurgence. We are proud of what we have achieved, but we are even more excited about what lies ahead.

I am deeply grateful to our employees, the Board of Directors, business partners, and shareholders. Your belief in our journey fuels our ambition. As we step into the future, my commitment is to lead Sunshine with vision, accountability, and conviction to build an institution that endures, adapts, and uplifts for generations to come.

S Sathasivam

Group Chief Executive Officer

28 May 2025