The macro-economic slowdown in the aftermath of April attacks was further compounded by the contraction of business and trading activity, declining investor confidence, and falling consumer purchasing power. Deficiency in implementing policy decisions to restore investor sentiments and rejuvenate tourism and other key sectors affected by the Easter attacks impacted consumer demand.
“We expect the finance expenses to reduce in the upcoming months with the further stabilization of interest rates at relatively low levels. Softlogic’s capital raising measures in the retail sector is progressing well; we expect to raise such funds by way of hiving off equity before the close of this financial year,” Chairman of Softlogic Holdings PLC, Ashok Pathirage said in the SHL’s interim financial account released to the Colombo stock exchange.
Group revenue increased 9% to Rs.37.2 billion during the 1HFY20 while quarterly revenue increased 10% to Rs.20 billion. Primary contributors to Group turnover were Retail (50%), Financial Services (20%) and Healthcare Services (19%).
Gross Profit improved 10% to Rs.13.5 Billion during the 1HFY20 maintaining Group GP margins at 36% levels. Quarterly Gross Profit grew 11% to Rs.7.2 billion. Distribution expenses increased 9% to Rs.1.7 billion during the period under review.
This led total operational expenses to rise 18% to Rs.10.2 billion during the 1HFY20. Quarterly operating costs increased 19% to Rs.5.4 Billion during the quarter.
Other operating income rose 16% to Rs.327 million during 1HFY20 while quarterly other operating income reported a 55% increase to Rs. 134 million. This composes of fee income from Softlogic Finance and other Sundry income. Group EBITDA for the period under review improved 10% to Rs. 5.8 billion while EBITDA for the quarter grew 11% to Rs.3 billion (up 11%).
Slow growth in tourism in the aftermath of the Easter Sunday attacks, a high interest rate and tax regime has affected performance coinciding with retail spending contracting at the same time.
One of the prime target markets of the retail sector for Softlogic is the tourist segment. Odel Flagship store is a primary shopping point for tourists in Sri Lanka. Tourist arrivals have fallen sharply since April with 1HFY20 reporting 635,712 arrivals as against arrivals of 1,023,998 in 1HFY19.
Asiri Health’s consolidated revenue reported a growth of 10% to Rs. 7.2 Bn as quarterly sector revenue improved 13% to Rs. 3.8 Bn.
Asiri Kandy opened a Diabetes Centre on 14th of November marking the World Diabetes day.
“We would be able to better serve the Maldivian patients in Sri Lanka at our six hospitals via this insurance scheme,” Pathirage said.
Financial Services witnessed a growth of 19% in topline to Rs. 7.6 Bn during 1HFY20 as quarterly revenue improved 18% to Rs. 3.9 Bn.
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