Exponential growth in profits for Singer

Group’s nine month post-tax profit soars 4662% to Rs. 436 m; Revenue up 32% to Rs. 11.2 b

Singer (Sri Lanka) Plc is enjoying exponential growth in profits in the first nine months of the year in addition to witnessing healthy improvement in its top line.Group after tax profit rose by 4,662% to Rs. 436 million in the first nine months ended on 30 September 2010 whilst pre-tax profit was up 1,942% to Rs. 779 million in comparison to relatively low base in the corresponding period of last year.

Gross profit topped the Rs. 4 billion mark to stand at Rs. 4.14 billion, up by 25% from Rs. 3.3 billion last year. Group revenue also crossed the Rs. 11 billion mark reflecting a 32% increase in comparison to Rs. 8.5 billion in the first nine months of 2009 financial year.

At Company level, revenue grew by 31% to Rs. 10.6 billion, and pre-tax profit by 2,769% to Rs. 643 million whilst net profit jumped by 8,813% to Rs. 373 million from Rs. 4 million a year earlier.

Significant factors for the growth in profits were the growth in revenue and margins and the decrease in net finance cost.

In his first review of quarterly results after assuming office as CEO, Asoka Pieris said Singer was enjoying continued growth in revenue and profits in the third quarter of 2010, as per the trend of the first two quarters.

 

“At the outset I wish to thank our Chairman (Hemaka Amarasuriya) who retired from the position of the Chief Executive Officer, for leaving behind a strong well built company. Third quarter revenue grew by 38% against the prior year and had the highest quarterly revenue this year. Year to date revenue grew by 32% against the prior year,” Pieris added.

Peiris said revenue growth in terms of volume and units was greater than the revenue growth in value, due to price reductions following reduction of Customs duties.

“In our traditional products we had very strong growth in refrigerators, televisions, washers, furniture, DVDs and audios, kitchen appliances and fans. Among the recent introductions we had very strong growth in air conditioners and computers. We see the consumer preferences change towards more up market products. As the market leader, we will be in the forefront of the change through our product offering, advertising and service,” Pieris said.

According to him Singer Finance (Lanka) Ltd. too has a significant growth in revenue and profits. In accordance with the requirements of the Central Bank of Sri Lanka, plans are afoot to list Singer Finance (Lanka) Ltd. in the Colombo Stock Exchange.

Whilst year to date performance reflects robust growth, profitability wise, third quarter was slightly depressed in comparison to the second quarter. In the June 2010 quarter Group net profit was Rs. 163 million and at Company level it was Rs. 137.7 million whereas figures in September quarter were Rs. 102.5 million and Rs. 94 million respectively.

Singer Group’s total assets as at 30 September 2010 stood at Rs. 11.95 billion up from Rs. 10.8 billion a year earlier but down from Rs. 12.2 billion as at June 2010.

In tandem with improved financial performance, economic conditions and stock market, Singer share price has enjoyed a good period. Its highest for the nine months of 2010 was Rs. 250, as against the highest of Rs. 67 in the previous year. The share price ended the quarter at Rs. 217.40, higher in comparison to Rs. 66 a year earlier. Singer share was trading between a high of Rs. 194.50 and a low of Rs. 190 on Thursday before closing the week at Rs. 193, up by 50 cents.