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Singer 3Q weighed down by heavy gearing, exchange losses

13 February 2019 10:15 am - 0     - {{hitsCtrl.values.hits}}

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Costs stemming from heavy borrowings and substantial exchange losses weighed on Singer Sri Lanka PLC as the country’s largest consumer durables retailer and white goods maker suffered a loss for the quarter ended in December 2018 (3Q19). 


Singer Sri Lanka reported Rs.15.9 billion revenues for the October – December period, up 10 percent year-on-year (YoY) while the group operating profit rose by 21 percent YoY to Rs.1.1 billion. 


The operating results are an indication that the maker of the name sake Singer sewing machines is slowly regaining the momentum it lost due to the vagaries in the weather and the economy.


Sale of consumer durables is a strong barometer of the health of an economy and the confidence the people have on the economy. 


Singer, a household brand made significant strides during the last three decades after it became a distributor for many world famous consumer durables brands and technology products. 


Today Singer is the largest retailer of smartphones via its network—the largest in the country.


Apart from consumer durables, the group has interests in financial services via its licensed finance company which supports sales via hire purchase. 


Hire purchase consists of a significant part of Singer’s sales as it enables the farming community to have the joy of owning a television, a refrigerator or a stereo set up.   


The ownership of the retail behemoth changed hands in 2017 when Sri Lanka’s Hayleys group controlled by the businessman Dhammika Perera bought 82.81 percent stake in Singer from its former controlling shareholder, Retail Holdings (Sri Lanka) BV, in a blockbuster deal valued at Rs. 15 billion.


Singer group reported a loss per share or 48 cents or Rs.180.4 million in losses compared to earnings of Rs. 49 cents a share or Rs.184.4 million recorded for the corresponding period in 2017. 


Meanwhile, for the nine months ended December 31, 2018, the Singer group reported earnings of 25 cents a share or Rs.94.2 million in total earnings compared to Rs.1.78 a share or Rs.669.8 million reported for the same period a year ago.


The sales for the nine months grew by 13 percent YoY to Rs.44.5 billion while the profit from operations grew by 12 percent YoY to Rs.3.24 billion. 


As a result of the substantial increase in borrowings, the finance cost rose by 57 percent YoY to Rs.827.6 million for the quarter and 31 percent YoY to Rs.2.18 billion for the nine months.


Singer Sri Lanka’s long-term borrowings rose by almost Rs. 5.0 billion during the nine months to December 2018. 


Meanwhile, the group incurred exchange losses of Rs.187.9 million for the quarter and Rs.355.2 million for the nine months as a result of its importation of certain white goods. The Sri Lankan rupee lost 19 percent in value during 2018 against the US dollar. 


As at December 31, 2018, Hayleys group entities held 90.43 percent stake in Singer Sri Lanka while Dhammika Perera directly held 1.85 percent in the company. 

 

 

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Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

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