Softlogic Group consolidated turnover increased 9.8% to Rs. 34.1 billion (Bn.) during the 1HFY19 while quarterly revenue grew 14% to Rs. 18.1 billion.
Top contributors to Group turnover were Retail (52%), Healthcare Services (19.4%) and Financial Services (18.7%). The non-core vertical which includes Automobile and Leisure together contributed 4.8% to Group turnover while the IT sector made up 5.2% of Group topline, said Chairman, Ashok Pathirage.
Gross Profit grew 10% to Rs. 12.3 Bn during the 1HFY19holding GP margins at36% (35.9% in 1HFY18). Quarterly Gross Profit also improved 13.2% to Rs. 6.5Bn resulting in a GP margin of 35.6%.
Synergy and economies of scale protected profit margins, although there is severe pressure due to waning business sentiment and the ad hoc macroeconomic adjustments imposed by policy-makers.
Distribution expenses declined marginally by 2.7% to Rs. 1.5 Bn while administrative expenses increased 11.8% to Rs. 7.1 Bn during 1HFY19. This resulted in the total operational expenses to increase 8.9% to Rs. 8.7 Bn during the 1HFY19 leading the operational cost margins to improve slightly to 25.4% in 1HFY19 from 25.6% in 1HFY18. Resultantly, total operating costs increased 14.3% to Rs. 4.5 Bn during the quarter.
Other operating income declined 67.1% to Rs. 283 Mn during 1HFY19 as the comparative period had registered one-off disposal gain(Rs. 185.5 Mn in 1HFY18)while fee income from new loans at Softlogic Finance nearly halved consequent to a change in their product mix during the period. Similarly, other operating income for the quarter also reduced 81.5% to Rs. 86.6 Mn owing to the one-off disposal gain registered in 2QFY18 (Rs. 184.9 Mn) Softlogic Life Insurance recognized a deferred tax asset of Rs. 2.4Bn during 1HFY19 by utilizing the available brought forward tax losses already provided for in the books up to 31st March 2018.
Profit after taxation for the first half of FY2018/19was at Rs. 2.4 Bn as opposed to Rs. 677.9 Mn in 1HFY18. Quarterly PAT reached Rs. 2.0 Bn (Rs. 248.2 Mn in 2QFY18).
The Retail sector post restructure, which comprises the consumer electronics, QSR, furniture, departmental store, branded fashion outlets and telecommunications companies registered a growth of 5.1% to Rs. 17.7 Bn during the first half of the financial year while the quarterly revenue improved 6.9% to Rs. 9.5 Bn.
This is currently the Group’s most capital-intensive sector which is redefining the country’s retail landscape with several new projects in the pipeline.
A 100% cash margin was imposed on refrigerators, TVs, air-conditioners and phones seriously impacting cash flows due to the recent policy of removing bank accommodation for import bill refinancing requiring cash upfront for establishing import LCs. The imposition of applicable restrictions on selected import items, especially, in the electronics and footwear sector defeats the long-term vision of establishing Sri Lanka as a shopping destination to compete with other regional tourist destinations. Short sightedness of policy makers could result in several adverse side effects reverberating in the retail sector which is inextricably intertwined with the tourist industry as a whole.
ODEL Group and Softlogic Retail continued to be dominant contributors to the sector performance.
Performance of Asiri Health continued steadily with quarterly revenue of the sector witnessing a growth of 16.1% to Rs. 3.4 Bn while cumulative sector revenue improved 11.2% to Rs. 6.6 Bn. Sector’s operating profit rose 4% to Rs. 1.6 Bn during the first half of the financial year with the quarter witnessing a marginal growth of 0.9% to Rs. 802.6 Mn.
Financial Services recorded a growth of 24.5% in turnover to Rs. 6.4 Bn during 1HFY19as quarterly revenue also improved 26.5% to Rs. 3.3Bn. Softlogic Life Insurance recorded a GWP of Rs. 4.9 Bn during 1HFY19, a growth of 34% compared to the previous year, while registering a GWP growth of 30% to Rs. 2.5 Bn during 2QFY19.
Softlogic Finance PLC’s assets were Rs. 21.3 Bn as at 30th September2018 while Customer Deposits was Rs. 15.6Bn.
IT business continued smoothly despite its import-oriented hardware operations being affected corporate investment slow down and ensuing currency depreciation.
Automobile sector revenue was Rs. 462.6 Mn for the first half of financial year. The wait-and-see approach taken by customers following duties and exchange rate depreciation dragged down the performance of this sector. Leisure sector recorded strong revenues with better-than-expected occupancy levels at the two hotels. Sector registered a topline growth of 10.3% to Rs. 1.2 Bn during 1HFY19 while the quarter made a turnover of Rs. 670.4 Mn (up 6.8%).
“Government plays a vital role in driving an economy and ensuring investment growth. Political vacillation and policy inconsistencies have affected consumer spending patterns slowing down the economy,” he added.
Top contributors to Group turnover were Retail (52%), Healthcare Services (19.4%) and Financial Services (18.7%). The non-core vertical which includes Automobile and Leisure together contributed 4.8% to Group turnover while the IT sector made up 5.2% of Group topline, said Chairman, Ashok Pathirage.
Gross Profit grew 10% to Rs. 12.3 Bn during the 1HFY19holding GP margins at36% (35.9% in 1HFY18). Quarterly Gross Profit also improved 13.2% to Rs. 6.5Bn resulting in a GP margin of 35.6%.
Synergy and economies of scale protected profit margins, although there is severe pressure due to waning business sentiment and the ad hoc macroeconomic adjustments imposed by policy-makers.
Distribution expenses declined marginally by 2.7% to Rs. 1.5 Bn while administrative expenses increased 11.8% to Rs. 7.1 Bn during 1HFY19. This resulted in the total operational expenses to increase 8.9% to Rs. 8.7 Bn during the 1HFY19 leading the operational cost margins to improve slightly to 25.4% in 1HFY19 from 25.6% in 1HFY18. Resultantly, total operating costs increased 14.3% to Rs. 4.5 Bn during the quarter.
Other operating income declined 67.1% to Rs. 283 Mn during 1HFY19 as the comparative period had registered one-off disposal gain(Rs. 185.5 Mn in 1HFY18)while fee income from new loans at Softlogic Finance nearly halved consequent to a change in their product mix during the period. Similarly, other operating income for the quarter also reduced 81.5% to Rs. 86.6 Mn owing to the one-off disposal gain registered in 2QFY18 (Rs. 184.9 Mn) Softlogic Life Insurance recognized a deferred tax asset of Rs. 2.4Bn during 1HFY19 by utilizing the available brought forward tax losses already provided for in the books up to 31st March 2018.
Profit after taxation for the first half of FY2018/19was at Rs. 2.4 Bn as opposed to Rs. 677.9 Mn in 1HFY18. Quarterly PAT reached Rs. 2.0 Bn (Rs. 248.2 Mn in 2QFY18).
The Retail sector post restructure, which comprises the consumer electronics, QSR, furniture, departmental store, branded fashion outlets and telecommunications companies registered a growth of 5.1% to Rs. 17.7 Bn during the first half of the financial year while the quarterly revenue improved 6.9% to Rs. 9.5 Bn.
This is currently the Group’s most capital-intensive sector which is redefining the country’s retail landscape with several new projects in the pipeline.
A 100% cash margin was imposed on refrigerators, TVs, air-conditioners and phones seriously impacting cash flows due to the recent policy of removing bank accommodation for import bill refinancing requiring cash upfront for establishing import LCs. The imposition of applicable restrictions on selected import items, especially, in the electronics and footwear sector defeats the long-term vision of establishing Sri Lanka as a shopping destination to compete with other regional tourist destinations. Short sightedness of policy makers could result in several adverse side effects reverberating in the retail sector which is inextricably intertwined with the tourist industry as a whole.
ODEL Group and Softlogic Retail continued to be dominant contributors to the sector performance.
Performance of Asiri Health continued steadily with quarterly revenue of the sector witnessing a growth of 16.1% to Rs. 3.4 Bn while cumulative sector revenue improved 11.2% to Rs. 6.6 Bn. Sector’s operating profit rose 4% to Rs. 1.6 Bn during the first half of the financial year with the quarter witnessing a marginal growth of 0.9% to Rs. 802.6 Mn.
Financial Services recorded a growth of 24.5% in turnover to Rs. 6.4 Bn during 1HFY19as quarterly revenue also improved 26.5% to Rs. 3.3Bn. Softlogic Life Insurance recorded a GWP of Rs. 4.9 Bn during 1HFY19, a growth of 34% compared to the previous year, while registering a GWP growth of 30% to Rs. 2.5 Bn during 2QFY19.
Softlogic Finance PLC’s assets were Rs. 21.3 Bn as at 30th September2018 while Customer Deposits was Rs. 15.6Bn.
IT business continued smoothly despite its import-oriented hardware operations being affected corporate investment slow down and ensuing currency depreciation.
Automobile sector revenue was Rs. 462.6 Mn for the first half of financial year. The wait-and-see approach taken by customers following duties and exchange rate depreciation dragged down the performance of this sector. Leisure sector recorded strong revenues with better-than-expected occupancy levels at the two hotels. Sector registered a topline growth of 10.3% to Rs. 1.2 Bn during 1HFY19 while the quarter made a turnover of Rs. 670.4 Mn (up 6.8%).
“Government plays a vital role in driving an economy and ensuring investment growth. Political vacillation and policy inconsistencies have affected consumer spending patterns slowing down the economy,” he added.
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