Singer (Sri Lanka) PLC announced today its results for the first quarter of the year ending March 31^st 2017.  The results showed a commendable Revenue growth despite sluggish consumer demand resulting from drought affecting the income of about 30% of the agriculture-based households in the country, combined with escalating prices due to devaluation and increase in VAT.

Group Revenue increased 13.7% to Rs. 12 Billion.   Traditional and thrust product lines of the Company experienced good growth - in smart mobile phones by 56%, televisions by 27%, deep freezers and furniture by 22% each, computers by 18%.

During 1^st Quarter of 2017, Singer chose not to pass on the full impact of the increase in VAT and weaker currency to customers.  This reduced gross margins to 29.1% compared to 30.6% last year. The increased mix of smart phone sales in 2017, which have lower margins, also impacted the overall group gross margin.

Net finance cost for the 1^st Quarter of 2017 increased 45% to Rs 434 million.  The lower margins and higher interest both impacted group profitability for the quarter under review. Group net profit for 1^st quarter was Rs. 246.6 Million, a reduction of 33% compared to the prior year (excluding the one-time gain recorded in the 1^st Quarter of 2016). Singer (Sri Lanka) company only, Net Profit in the 1^st Quarter increased 49% to Rs. 319.6 Million mainly due to dividends from subsidiaries.

Subsidiary Companies, Regnis (Lanka) PLC had a Profit of Rs. 86 Million and Singer Industries (Ceylon) PLC had a Profit of Rs. 9.4 Million. Revenue of Singer Finance (Lanka) PLC increased by 27% although Net Profit decreased due to higher financing costs, initial cost of credit card operations and impairment of the replaced ERP  software programmes.

The company mentioned that its key business initiatives are:

• To accelerate the renovation and expansion of existing shops to increase the retail space to cater for additional products and brands (in particular furniture);
• To strengthen and enlarge manufacturing operations with new factories, additional machinery and more advanced technology;
• To expand the Singer credit card that was launched in 2016.

Company Comment

Commenting on the First Quarter results of 2017, Asoka Pieris, Group CEO stated, “We look forward to the transient weaker trading conditions gradually improving during the remainder of 2017 and we remain confident that our key business initiatives will continue our impressive revenue and profit growth trajectory”.