Singer Sri Lanka turns a profit in Dec with consumer sentiment recovery

ECONOMYNEXT- Singer Sri Lanka Plc, the island’s largest durable goods retailer, said it posted 306.7 million rupees in profits for the December quarter, bouncing back from a loss of 16.06 million rupees a year ago on recovering consumer sentiment.

The Singer group earned 82 cents per share in the December quarter. The firm’s share closed trading at 33.80 rupees on Tuesday.

For the nine months ending December, Singer earned 75 cents per share on profits of 281.81 million rupees, which had grown 9 percent.

The group posted its highest profits in six quarters. The firm in an earnings review said consumer demand is showing a gradual recovery since the Easter Sunday terror attacks.

Sri Lanka has grappled with low growth for the past three years, which has prompted the government to cut taxes and interest rates.

The government’s stimulus package will give a further boost in the coming quarters, Singer Chief Executive Mahesh Wijewardena said.

“We are optimistic on the medium to long-term recovery of the consumer durables market, particularly given the recent tax concessions and the relatively accommodative monetary and fiscal policy stance adopted by the government,” he said.

“The group will continue to place strategic emphasis on driving volume growth across key product categories through targeted marketing while managing its costs through streamlining processes, digitisation and effective working capital management.”

For the December quarter, revenue fell 2.4 percent to 15.5 billion rupees from a year earlier.

IT product sales had fallen by nearly 1.5 billion rupees which was buoyed by higher revenue on consumer electronics, home appliances and financial services. Singer said it has been repricing products to boost sales.

Cost of sales fell 7.8 percent to 10.5 billion rupees, on streamlining of internal processes while direct interest costs at the group finance arm grew 41.8 percent to 473.5 million rupees.

Gross profits grew to 8.5 percent to 4.6 billion rupees.

Finance costs for the quarter fell 19 percent to 822.2 million rupees as government interventions to reduce interest rates took hold.

Long-term borrowings fell to 8.1 billion rupees at end-December from 10.6 billion rupees at the start of the financial year nine months earlier.

Current borrowings grew to 20.7 billion rupees from 19.5 billion rupees over the nine months.

Pre-tax profits of Singer for the December quarter grew on consumer electronics and home appliances, while IT sales and financial services recorded a downturn.