Consumer durables retailer Singer Sri Lanka said it recorded ‘marginal growth’ for the year ended December 31, 2013 (FY13) amid challenging business environment aggravated by low customer demand.
The group net profit for the year fell 60 percent Yearon-Year (YoY) to Rs.458.8 million, the financial accounts released by the company showed.
The revenue remained flat during the year at Rs.25.4 billion with gross profits also unchanging at Rs.8.7 billion. However, selling and administration costs rose 11 percent Year-on-Year to Rs.6.6 billion.
The net finance costs also widened during the year to Rs.1.26 billion from Rs.955 million. Earnings per share deteriorated to Rs.3.67 from Rs.9.33 in FY12.
Meanwhile for the final quarter of the year (4Q13), the group reported a net profit of Rs.93 million, down from Rs.372.5 million in 4Q12.
The revenue recorded a marginal 3 percent YoY to Rs.6.9 billion, boosting the gross profit to Rs.2.5 billion from Rs.2.3 billion.
However, considerably higher finance and selling and administration costs have hampered profits.
“The business environment continued to be difficult in 2013 - a trend that we saw from second half of 2012, with low demand by the customers and difficulty in collections.
The consumer segments served by Singer were further affected by an increase in electricity charges in the current year on top of the increase last year,” Singer Sri Lanka Group CEO Asoka Pieris said.
However he expressed confidence about the medium-term prospects for Sri Lanka “Hence while on one hand we had to be mindful of the slowdown in the current environment, we also had to consider being ready for the medium- term growth. As a result, we did not stop our renovation of existing shops, expansion of shops, venturing into new areas, adding new brands and agencies and improvement of our infrastructure,” Pieris noted.
A segmental analysis showed that despite increased revenue during the year, the pre-tax profitability of all the sectors declined. The sewing related products segment reported revenue of Rs.2.38 billion, down from Rs.2.67 billion in FY12. The post-tax profit of the segment fell to Rs.41.3 million from Rs.167.1 million. The revenue of consumer electronics segment stood at Rs.5.63 billion, down from Rs.6 billion. The profits also declined to Rs.99.7 million from Rs.439 million.
The white goods segment also reported less revenue of Rs.7.8 billion for the year. The profits came down to Rs.117.4 million from Rs.487.4 million.
The communications business reported higher revenue of Rs.3.1 billion, up from Rs.1.73 billion. However the pre-tax profit of the segment stood at Rs.35.8 million, down from Rs.73.3 million. The finance arm of the group, Singer Finance Lanka posted revenue of Rs.1.76 billion, up from Rs.1.6 billion. The pre-tax profit of the segment grew to Rs.357.5 million from Rs.332.5 million.