Consumer durables giant Singer (Sri Lanka) PLC posted a net profit of Rs.265.46 million for its third quarter (3Q16), a 76 percent growth year-on-year (YoY) despite warnings that the coming year would fare poorly for consumer durables due to higher taxation and interest rates.
Singer’s basic earnings per share increased to Rs.2.12 from Rs.1.36 YoY, against the market value of its shares at Rs.126.
Revenue for 3Q16 increased 21 percent YoY to Rs.11.03 billion, while cost of sales increased 18 percent YoY to Rs.7.40 billion.
During the quarter, contributions to group revenue from home appliances increased to Rs.3.49 billion from Rs.2.98 billion YoY, while the contribution from IT products increased to Rs.2.60 billion from Rs.1.80 billion YoY. Consumer electronics revenue increased to Rs.1.5 billion from Rs.1.47 billion YoY and furniture, sewing and financial services sectors also posted
Selling and administrative expenses increased to Rs.2.47 billion from Rs.2.11 billion YoY during 3Q16.
The group asset base increased to Rs.39.56 billion from Rs.32.26 billion at the start of the financial year due to a corporate restructuring exercise converting two associate companies into subsidiaries, as well as expansions at the group’s refrigerator manufacturing factory.
The group long-term interest-bearing borrowings increased to Rs.10.67 billion in 3Q16 from Rs.8.09 billion at the start of the financial year, while short-term interest-bearing borrowings increased to Rs.9.14 billion from Rs.7.04 billion in the same period.
During the first nine months of the year, Singer’s net profits increased 107.20 percent YoY to Rs.1.59 billion, while revenue increased 22 percent YoY to Rs.33.14 billion and cost of sales increased 21 percent YoY to Rs.22.24 billion.
Despite the forecasted slowing down in consumption, Singer said, “Consumer demand continued to grow despite the increase in interest rates, exchange rates, VAT and inflation.”
However, the value-added tax increase was only in effect for two months and 12 days during the period and came into permanent effect in October after legal setbacks.
Home appliances contributed Rs.11.55 billion to revenue during the nine months, up from Rs.9.22 billion YoY. IT products contributed Rs.6.87 billion compared to Rs.4.81 billion YoY and contributions from furniture increased to Rs.1.73 billion from Rs.1.40 billion YoY.
Revenue from consumer electronics increased to Rs.4.52 billion from Rs.4.34 billion YoY and Rs.2.31 billion was contributed by sewing equipment, up from Rs.1.83 billion YoY.
With the introduction of a new credit card, the finance sector revenue increased to Rs.3.97 billion from Rs.3.51 billion YoY.
The largest shareholder in Singer at the end of 3Q16 was Retail Holdings (Sri Lanka) BV with 79.68 percent of the shares. CF Ruffer Pacific Fund held 3.99 percent of the shares, while Ceybank Unit Trust held 3.94 percent.