IT and Communication segment grow at Singer
The effects of last year's drought, coupled with consumer fears of an
increase in electricity tariffs, had a negative impact on the overall
business environment, leading to almost flat revenue growth in the first
quarter. The first quarter saw the company's gross sales revenue
increase by 2%.
However, due to the application of the Value Added Tax regime to the
retail sector, net revenue, which is accounted after VAT, decreased
marginally compared to the prior year for the company although group
revenue increased marginally. However, the IT and communications
segment, did well and revenue grew by 114% compared to the first quarter
of the previous financial year.
This segment thereby became the Group's third largest business
segment after white goods and consumer electronics.
The impressive expansion of Singer Sri Lanka's communications segment
was rooted in increases in the sales of computers by 35%, digital
cameras by 25% and mobile phones by 900%. The Group's transport and
furniture segments also grew, by 43% and 25%. Decreased revenues were
experienced in other segments.
Singer Finance, the Group's financial services subsidiary, impressed,
with revenue increasing by 17.5%, although net profit decreased by 22%.
While Singer Sri Lanka maintained its gross profit and restricted
selling and administration expenses to 9%, the increase in financial
costs negatively impacted profits. Compared to the first quarter of the
2012 financial year, the net financial cost doubled due to an increase
in interest rates by almost 70% and an increase in borrowings. As a
result, the company's profit decreased by 59% while Group profit
decreased by 50%.
Despite these difficulties, the company was optimistic about the
future, considering improved growth in revenue in April, and the
prospects of reduced interest rates in the coming months. The company
has strong fundamentals and outstanding infrastructure, which includes
the country's most extensive retail network, the industry's most
widespread service network and the widest offering of brands. It remains
confident that its unrivalled value proposition will continue to attract
Sri Lankans from across the island.