Sri Lanka’s Softlogic in Rs762mn Sept quarter loss

ECONOMYNEXT – Sri Lanka’s Softlogic Holdings made a loss of 762 million rupees in the September 2019 quarter compared with profits of 372 million rupees a year ago as finance costs stayed high and its retail and tourism businesses recovered slowly.

The loss per share was 64 cents, interim accounts showed. The stock closed unchanged at 16 rupees Tuesday.

In the six months to September 2019, the group lost 1.27 rupees a share.

Groups revenue grew 10 per cent from a year earlier to 20 billion rupees in the September quarter.

The accounts showed sharp increases in administrative and finance costs as it expanded its retail and hospital network.

Softlogic group, which has interests in retail, financial services, healthcare, tourism and automobiles, said sales were still recovering slowly after the Easter Sunday suicide attacks, which hit tourist arrivals and domestic consumer demand.

“As Softlogic is a consumer-driven business model, it experienced the immediate impact of these economic shocks,” Softlogic Holdings chairman Ashok Pathirage said.

“Retail was affected by the dismal growth and financial costs, while healthcare’s robust performance was offset by losses of Kandy hospital, which is expected to breakeven by end of the financial year, while leisure was mostly affected by lack of tourist traffic.”

Stringent cost discipline measures and quicker cash-conversion initiatives such as expedited debtor clearance measures in addition to other standard cost and waste management systems helped the group mitigate margin erosion with benefits of economies of scale while also somewhat negating the adverse impact of the April attacks, he said.

“Nonetheless, we expect a slow and steady recovery in the economic landscape of the country with strong political stability and leadership being restored after the Presidential Election,” he said.

(COLOMBO, 19 November 2019)