As always I am pleased to present the performance of your Company for FY 2018-19.
FY 2018-19 in retrospect
Your Company reported net sales of f 1711.87 million in FY 2018-19 compared to f1352.53 million in the previous year thereby registering a growth of 27%. Domestic salesgrew by 31.30% and exports grew by 8.87%. The overall sales growth was as per forecast.The lesser growth in exports was covered up by domestic sales. Exports continued to facesimilar problems as those of last year due to external reasons. The tendering for PPRvaccine from FAO still remained slower.
Your Company recorded a net profit after tax of f 438.52 million in FY 2018-19 asagainst f 305.58 million in the previous year a growth of 44%. The growth in profit wassubstantially higher than the growth in sales.
Like in the previous year this can be attributed to operational improvements prudentproduct mix changes and credit control.
EBIDTA margins improved from 36.67% in FY 2017-18 to 39.58% in FY2018-19. ROCEstrengthened from 24.98% to 28.10% thereby revalidating our commitment to make a betteruse of resources throughout the year.
The year saw other contributions:
The African animal vaccine manufacturing project is well on track.
We embarked on a new mass immunisation program in backyard animals in UP andBihar besides continuing the program in Odisha Chhatisgarh and in Jharkhand. All theseactivities are being carried on by our Veterinary Social Business Division.
An elaborate marketing and distribution network has been created in Nepalthereby paving the way to start domestic sales from Hester Nepal.
New products were introduced in the Animal Healthcare division.
The lessons of FY 2017-18 surely helped us in FY 2018-19. Better planning betterforecasting keeping in mind unforeseen external circumstances made us much more stronger.This added strength will help us in years ahead.
Preparing for the future
Through Texas Lifesciences our Company which manufactures animal health products weare near to achieving self-reliance in manufacturing our own animal health products. Thishas eased our supply and quality issues. While we are still in the process of shifting allthe manufacturing of our products to Texas Lifesciences newer products too are beingadded at the same time which are being produced there.
While continuing to reach-out deeper within India we have laid the foundation forgeographical diversity by focusing on Africa. Our own depots in Tanzania and in Kenya anddistributors in a few other countries mainly in Eastern and Southern Africa will lead usinto reducing dependency on any one area or one region or one country. Productregistrations are well on way and in two years time this geographical diversity would bewell visible. We have now embarked on creating a very strong marketing and distributionnetwork in Nepal. Through Hester Nepal we are increasing our domestic sales therebyreducing the dependency on the international PPR vaccine tender business. Additionalvaccines and health products have been registered in Nepal.
In order to achieve product diversity your Company has started focusing on the largeanimal vaccines and health products. Success in this endeavor was clearly seen with thecontribution of poultry health care division reducing from 84% in FY 2017-18 to 76% in FY2018-19. This endeavor continues.
As you all may be aware The Government of India in its first cabinet meeting afterthe formation of the new government took a decision (besides taking many others) tofocus on animal health. It announced an initiative to control Foot and Mouth Disease (FMD)and Brucella disease in animals.
The government cleared an outlay of f 13342 crores (f 133.42 billion) for thisinitiative.
The end result achievable through this initiative is immunisation of animals againstFMD and Brucella disease improvement in the health of animals primarily improving milkyields (due to better animal health) and less disease incidences. Farmers in India willalso be benefitted economically as well as in terms of their own health.
Hester will be a contributor in the Brucella disease eradication program by way ofmaking the vaccine available across the country through the initiative of the Government.Hester has already geared-up to ensure that it is able to supply the required quantitiesin the coming year.
In conclusion our team's dedication helped us towards increasing our market share inIndia towards creating higher international awareness and towards improving the financialworking. The year FY 2018-19 ended as a good year with our team gaining additionalconfidence towards meandering Hester to the next level!
CEO & MD