Sri Lanka Softlogic Holdings June net up 14-pct
Aug 16, 2018 11:29 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Profits at Sri Lanka's listed Softlogic Holdings grew 14 percent from a year earlier to 49.7 million in the June 2018 quarter on improving margins arising from group synergies despite falling earnings across retail, healthcare and financial services, interim accounts showed.
Earnings amounted to 5 cents a share in the quarter, interim accounts filed with the Colombo Stock Exchange showed.
The share last traded at 22.20 rupees.
In the June quarter, Softlogic gross profits grew 6.7 percent from a year earlier to 5.8 billion rupees, on revenue growth of 5.4 percent to 16 billion rupees and cost of sales increasing a slower 4.7 percent to 10.2 billion rupees.
The retail segment of the group which includes listed Odel Plc contributed 51 percent to group revenue, followed by 20 percent from Healthcare which includes listed Asiri Hospitals Holdings, and 19 percent from financial services which includes Softlogic Life Insurance and Softlogic Finance.
"Better bargaining power led by group synergies paved the way for margins improving to 36.3 percent in the quarter, from 35.9 percent a year earlier," Chairman Ashok Pathirage told shareholders.
Other operating income fell 50 percent to 196.4 million rupees, after a one-off commission income in retail the previous year and lower revenue from the subsidiary finance company, the group said.
Administrative expenses rose 3.6 percent to 3.4 billion rupees and distribution costs grew 3 percent to 688 million rupees.
Net finance cost inched up 1.6 percent to 963.4 million rupees.
Group net debt reduced 54.3 billion rupees in the June quarter, down from 57.2 billion rupees the previous quarter.
This reduction was due to the rights issue of 3.9 billion rupees that was utilized settle debt in April 2018.
"Interest cost savings resulting from reduction in debt will be reflected in the books in the upcoming periods," Pathirage said.
Insurance liabilities of subsidiary Softlogic Insurance transferred to policyholders, which is treated as an expense, amounted to 264.3 million rupees, up 11.4 percent from a year ago.
Softlogic Holdings' retail segment saw revenue increase 3.2 percent from a year earlier to 8.2 billion rupees in the June 2018 quarter, with profits falling 34 percent to 182 million rupees.
"The branded fashion segment continued its steady pace amidst challenging economic conditions," Pathirage said.
A 40,000 square feet shopping mall at Colombo City Centre will open end-August and Odel Mall opens in 2020, he said.
The Healthcare segment of the group reported revenue growth of 6.5 percent in the quarter to 3.2 billion rupees with earnings growing 1.1 percent to 422 million rupees.
The group is investing in a high-tech cancer treatment facility and 180-bed hospital in Kandy.
Financial services reported revenue growth of 22.4 percent from a year earlier to 3.1 billion rupees in the June 2018 quarter, with profits falling 18 percent to 226.7 million rupees.
Softlogic Life Insurance gross written premiums grew 38 percent to 4.6 billion rupees.
Total assets as Softlogic Finance increased 2.4 percent to 21.6 billion rupees and deposits grew 3 percent to 15.7 billion rupees.
Tech which comprises software and hardware solutions posted revenue of 666.5 million rupees with earnings falling 75 percent to 12.7 million rupees.
Automobile revenue was 278 million rupees in the June quarter on improving sales of long coaches on booming tourism but losses deepened 154 percent to 48 million rupees.
The hotels and property segment which includes Movenpick and Centara Ceysands Resorts and Spa saw revenue increasing 15 percent to 496 million rupees with losses falling 24 percent to 173.4 million rupees.
"Movenpick Hotel Colombo’s tie-ups with airlines and international sports teams proved to be beneficial," Pathirage said. (COLOMBO, 16 August 2018)