Delivering an outstanding performance, the Singer Group announced a post-tax-profit of Rs. 869.38 million for the third quarter (Q3) for FY20.
On a cumulative basis, Singer reported a substantial increase in consolidated profit-after-tax for the nine-month period ending December 2020 at Rs. 1.76 billion compared to Rs. 366.43 million in FY 2019. At Company level, Singer (Sri Lanka) PLC recorded a cumulative profit of Rs.1.17 billion, compared to Rs.102.97 million the previous year.
This performance reflects Singer’s resilience and effective implementation of the Group’s operating strategy, focus on driving targeted sales, continued robust demand for IT products, its efficient management of product margins and cost structure and the lower finance cost.
Contributing to these results was Singer’s consolidated revenue growth, which for Q3 increased by 20% to Rs. 18.66 billion. Cumulative revenues for year-to-date Q3 amounted to 16% to reach Rs. 49.4 billion.
Timely price revisions facilitated improved profitability margins with consolidated gross profit increasing by 8% to Rs.4.91 billion during the quarter and also rising by 8% on a cumulative basis.
As a result of pursuing a strong sales drive, the company’s selling and administrative expenses for Q3 increased by 8% to Rs. 3.28 billion. Due to continued pressure on repayment capabilities reflecting the economic toll of the pandemic, costs on trade and other receivables increased by 51% during the quarter.
While operating profits declined by 1% to Rs. 1.32 billion during the quarter, the operating profit margin narrowed to 7.1% in Q3 FY2021 compared to 8.6% in the corresponding quarter of last year. However, on a cumulative basis operating profit recorded an increase of 8% to Rs.3.48 billion. To stem rising impairments, the company has strategically focused on implementing proactive collection and monitoring measures.
The Group continued to pursue an aggressive sales drive leveraging its extensive branch and dealer network and digital capabilities. Demand for IT products remained strong during the quarter reflecting increased digital adoption due to remote working and online education arrangements.
Overall profitability continues to be supported by the sustained reduction in the Group’s borrowing costs. A sharp decline of finance costs during the period under review was due to the gradual decrease in market interest rates, extension of supplier credit periods as well as continued rationalization of borrowings, thereby complementing the improvement in core profitability to drive net earnings growth.
Commenting on the Group’s quarter performance, Mahesh Wijewardene, Group Chief Executive Officer said, “We are extremely pleased have delivered a resilient performance amidst a challenging market environment. Despite the outbreak of the second wave of infections in October 2020, the Group has performed exceptionally well driven by buoyant demand for key product categories and a timely strategy which has enabled it to capture emerging opportunities thus consolidated its market leadership position.”
“With the expected successful roll-out of the vaccination in Sri Lanka raising hopes of an economic recovery and near-normalcy, Singer remains extremely optimistic and is well positioned to drive sustainable growth,” Wijewardene added.
The Company has announced a subdivision of its ordinary shares, where each ordinary share will be split into 3 shares, increasing shares in issue from 375,628,830 to 1,126,886,490.
The Board of Directors of Singer (Sri Lanka) PLC comprises Mohan Pandithage – Chairman, Dhammika Perera – Co-Chairman, Mahesh Wijewardene – Group Chief Executive Officer, Deepal Sooriyaarachchi, Dumith Fernando, M. H. Jamaldeen, Sarath Ganegoda, Dilip de S Wijeyeratne and Gayani De Alwis.