Singer Sri Lanka profits plunge in June quarter on credit losses
ECONOMYNEXT – Profits at Singer Sri Lanka Plc, a consumer durables distributor with a financing arm plunged 93 percent to 27.2 million rupees in the June 2019 quarter from a year earlier, amid a currency collapse and suicide bomb attacks on Easter Sunday and bad loans.
The group reported earnings of 7 cents per share for the quarter.
Group revenues fell 8 percent to 13.8 billion rupees, cost of sales fell at a faster 15 percent to 9.1 billion rupees while direct interest grew 46 percent to 438 million rupees.
The firm said economic conditions were weak and Easter Sunday suicide bomb made customers delay purchases.
But group maintained gross profits at 4.2 percent during the quarter.
"We experienced a challenging quarter with Singer susceptible to market and economic conditions more than others," Mahesh Wijewardene, Group Chief Executive Officer said in a statement.
"However, we have initiated several proactive and innovative strategies which aim to enhance earnings growth and profitability in the near future.”
At company level sales were down only 1 percent to 11.6 billion rupees.
Sri Lanka’s rupee collapsed to from 153 to 182 in 2018, but has recovered to 176 in 2019, while liquidity shortages that comes from capital flight, which kill domestic demand, also eased after May. But the Easter Sunday attacks came in April.
But bad loans at its financing arm and write-off of sales made on credit cost the firm 213 million rupees during the quarter, up from 69 million rupees last year. Singer Finance made more provisions partly due to new accounting rules. (Colombo/Aug09/2019)