Despite challenging first half:

Singer strengthens infrastructure

Singer Sri Lanka continued apace with its expansion plans in the first half of financial year 2013, opening new branches and service centres including Singer Mega outlets at the Ja-Ela K-Zone and in Panadura.

Singer also introduced new brands and products, such as the Samsung UltraBook, the Beko and Grundig range and Lenovo computers and a new series of refrigerators under the Singer brand.

Although difficult business conditions adversely impacted the Group's bottom line, the company continued its expansion and upgrading to keep in line with changing customer requirements and meet the expected demand in the medium term.

Apart from the overall challenges in the business environment, Singer was specifically impacted by the sharp rise in electricity tariffs and the application of the Value Added Tax regime to the retail sector. As a result, overall net revenue for the Group declined marginally.

However, Singer's key communications segment recorded a 116% increase in revenue, while the transport and furniture segments grew by 12% and 18%.

Singer Finance continued to post good results, recording a 19% increase in revenue and 8% growth in net profit.

Singer group profits decreased by 51% while company profits declined by 56%. The largest factor impacting profits was net finance cost, which rose by 65% during the period under review, largely due to an increase in interest rates.

To reduce finance costs, Singer Sri Lanka held a Rs. 1.5 billion debenture issue in May, which was oversubscribed upon issue despite the interest rate being lower than similarly rated debenture issues. The Group also secured a Rs. 1.3 billion loan from overseas lenders in July, at a reduced rate.

In spite of the challenges faced in the first half of the financial year 2013, Singer Sri Lanka remains confident in its prospects. Indeed, the Group's strengthened infrastructure will allow it to capitalise on improving market conditions.