Amidst challenging year RIL to consolidate business lines
Commercial space developers, RIL Property PLC (RIL) will be consolidating its businesses this year while drawing up plans for some of their lands in Colombo for the long term.
Ms. Hiroshini Fernando
The downturn in the economy has had an impact on the company’s sales. “The demand was dull for sales in Parkland I, which is the new building. However 65 per cent of the space has been leased,” Hiroshini Fernando, CEO/Executive Director told the Business Times in an interview. She noted that the new building started rentals into the last quarter of the financial year. “So from January to March this year we will get revenue from the rentals in to the balance sheet.”
For the quarter ended 31 December 2018, RIL Property PLC recorded a Revenue and Net Profit after Tax (NPAT) of Rs.182.33 million and Rs.16. 80 million, respectively. For the cumulative nine months ended 31 December 2018 it achieved Revenue and NPAT of Rs. 554.80 million and Rs.115.56 million, respectively.
Parkland 1 cost the company Rs.695 million as from the initial three stories they added two more floors.
UML has lands in Orugodawatte and Vauxhall Street. “We need to draw plans and decide how we are able to utilise this land bank. It will be a long-term plan,” Ms. Fernando added.
She noted the currency depreciation witnessed last year will impact them. “When most things are expensive, people will scale down their fixed costs. As a result they will change the location. This has not happened. But it will very much be the case,” she added. She noted that RIL’s strategy in this instance is to give their clients the best service in a bid to counter this.
FoodBuzz (Pvt) Ltd, RIL’s subsidiary which runs BreadTalk franchise, contributed marginally to Group Revenue and Net Profit with Rs. 332.75 million and Rs.9.15 million, respectively, during the said period. “FoodBuzz is making profits from the second quarter of last year,” Ms. Fernando said noting that the decline in disposable income has affected its sales. “Also the currency depreciation has affected the sales of BreadTalk,” she said. The company has plans to launch in mega malls. “Our newest outlet will be at Shangri-La,” Mrs. Fernando noted.
To contain the impact of term loans substantially constituted of acquisition financing relating to UML, RIL raised Rs.1.6 billion in a Rights Issue during April 2018. As a result, the company and group level gearing has been contained at 18.91 per cent and 21.55 per cent, respectively.
Also amongst its achievements, RIL despite being a young company received the bronze award for its maiden annual report in the Annual Report Awards held recently.