Softlogic Holdings records Rs 3 bn PAT in 2018/19

Softlogic Holdings PLC recorded a Profit After Tax (PAT) of Rs. 3 billion, a 30% growth for year ending March 31, 2019 while a 32% growth was reported during the quarter with a PAT of Rs. 855 million.

The Company also posted a consolidated turnover of Rs. 75.1 billion. The quarterly Group revenue witnessed a 30% growth to Rs. 21.6 billion. Gross Profit for the year increased 17% to Rs. 27.7 billion to register a Gross Profit margin of 37% in FY19 from 36% in FY18. Quarterly Gross Profit also improved 33% to Rs. 8 billion.

Group EBITDA improved 3% to Rs. 11.3 billion during the year while quarterly EBITDA grew 62% to Rs. 3.4 billion. The operating profit for the year increased marginally to Rs. 8.4 billion (Rs. 8.3 billion in FY18). PBT for the year was Rs. 1.8 billion as quarterly PBT increased 18% to Rs. 1.2 billion.

“We faced numerous challenges stemming from the external environment during the financial year 2018/19 which was worsened by political unrest during 3QF19,” said Chairman and Managing Director, Softlogic Group, Ashok Pathirage.

“A general slowdown of the economy and policy uncertainty diminished business sentiments which were further exacerbated by the USD/ LKR and interest rates reaching a higher range”.

The 100% cash margin requirement affected the retail sector and the 200% cash margin requirement adversely affected the automobile sector. “Furthermore, the most recent Easter Sunday terror attacks has had a significant economic setback. The aftermath of this incident has affected our businesses with retail stores being closed during the period of unrest. The leisure sector has been devastated by lack of interest in Sri Lanka as a safe tourist destination”.

Nonetheless, consolidated turnover reported a 14% increase in revenue to Rs. 75.1 billion revenue witnessed a 30% growth to Rs. 21.6 billion. Primary contributors to Group topline for the financial year were Retail (50% contribution), Healthcare Services (18%), Financial Services (18%), IT (5%) followed by the non-core sectors –Automotive and Leisure.

Gross Profit for the year increased 17% to Rs. 27.7 billion to register a GP margin of 37% in FY19 from 36% in FY18. Quarterly Gross Profit also improved 33% to Rs. 8 billion. Other Operating Income for the year was Rs. 1 billion as opposed to Rs. 1.8 billion in FY18. This comprises recurrent and non-recurrent income source such as investment income, fee & commission income emanating from retail and financial services as well as one-off disposal gains across the Group.

Distribution and Administrative expenses increased 14% and 19% to Rs. 3.5 billion and Rs. 6.7 billion respectively during FY19. Total operational expenses were Rs. 20.2 billion (up 18%) during FY19.

Distribution cost for the quarter increased 73% to Rs. 1.1billion while administration costs increased 14% to Rs. 4.8 billion. Quarterly operational cost increased 21% to Rs. 5.9 billion primarily led by Group expansion and other inflationatary pressures. Group EBITDA improved 3% to Rs. 11.3 billion during the year while quarterly EBITDA grew 62% to Rs. 3.4 billion. Operating profit for the year increased marginally to Rs. 8.4 billion (Rs. 8.3 billion in FY18). Operating profit for the quarter increased considerably to Rs. 2.6 billion to witness an operating profit margin improvement from 8% in FY18 to 12% in FY19.

Retail sector revenue grew 6% to Rs. 37.7 billion in FY19 amidst depressed purchasing ability of consumers triggered by systemic economic condition. Quarterly revenue reported a topline of Rs. 10.4 billion (up 20%). Performance of Asiri Health persisted its growth rates with revenue growing 12% to Rs. 13.5 billion during the year. Quarterly revenue of the hospitals grew 18% to Rs. 3.6 billion. Central Hospital Ltd., continued to be the top contributor (36% contribution), followed by Asiri Hospital Holdings PLC (30% contribution) and Asiri Surgical Hospital PLC (25% contribution).

Financial Services witnessed a growth of 23% in turnover to Rs. 13.6 billion during the year as quarterly revenue also increased 21% to Rs. 3.7 billion. Sector operating profit reported Rs. 1.8 billion with a quarterly operating profit of Rs. 397 million. Annual revenue of the IT sector revenue grew 11% to Rs. 4 billion while the quarter reported an increase of 9% in revenue to Rs. 1.2 bilion. Operating profit of the sector was Rs. 326 million during FY19 as the quarter reported an operating profit of Rs. 118 million. Sector PAT was Rs. 132 million during the year under review.

Leisure sector revenues improved 21% to Rs. 3.1 billion during FY19.

The quarter reported a revenue growth of 41% to Rs. 1.2 billion. Centara Ceysands emerged to be the primary contributor to sector topline recording steady occupancy levels throughout the year. Automobile sector revenue increased to Rs. 3.1 billion during FY19 as opposed to Rs. 1.3 million in FY18. This sector was affected by the 200% cash margin requirement during the year.

 

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