ECONOMYNEXT - Profits at Singer Sri Lanka Plc, a large consumer durables seller fell 4 percent to 153 million rupees, though turnover grew and the firm said it was expecting a pick-up with rains driving a revival in the agriculture sector.
The group reported earnings of 41 cents per share. In intra-day trading Wednesday the stock was quoted at 38 rupees, flat.
"The Consumer Durables industry, where Singer is present is more susceptible to market conditions than other industries," Group Chief Executive Officer Ashoka Pieris told shareholders.
"When customer income and sentiments decrease, the demand for consumer durables is well
below that of the general market.
"At the same time when customer income and sentiments increase, the demand for consumer durables is above that of general market demand. We have seen this oscillation over many years."
Sri Lanka hit a balance of payments crisis in 2015/2016, barely after the 2011/2012. Though the BOP crisis ended the rupee continued to fall in 2017, under the inflationist-devaluationism followed by the current administration, killing purchasing power of the people, on top of a drought.
Singer has changed its financial year to March from December a take-over by publicly traded Hayleys group. Singer reported earnings of 2.62 rupees per share in the 15 months to December on total profits of 982 rupees down from 2.1 billion a year earlier.
"During this period the continuous drought resulted in a sharp drop in harvest," Pieris said.
"Since almost 30 percent of households are dependent on Agriculture, the drop in harvest eroded the purchasing power of a large market segment.
"This is in addition to customer purchasing power been affected by increased value added tax (VAT), higher interest rates and floods in wet zone. Consumer sentiments were affected by factors mentioned under quarter results."
Singer said it was looking to boost e-commerce operations and expand sales of its furniture business. (Colombo/May16/2018)