Singer anticipates recovery in second half year

Despite a slowdown in the consumer durables market, Singer (Sri Lanka) Limited's third quarter group revenue increased significantly from Rs.2.9 billion to Rs.3.3 billion, a growth of 14.7% through a mix of price and volume gains.

According to the interm financial statements for the nine months ended 30 September 2007, Singer Chairman Hemaka Amarasuriya said the revenue increase 'reflects an improved performance over the sluggish first half year's operations.' Amarasuriya also said that in terms of unit sales, market patterns with traditional categories temporarily lost momentum while adequate demand was seen for new and innovative products. "As consumers grapple with a high inflationary regime, there is a tendency to postpone purchase of traditional products which are mainly for replacements."

High finance costs amounting to Rs.769.6 million, mainly due to escalating interest rates, prevented the company from recording improved results for net profit after tax. Net profit year-to-date of Rs.258.4 million is a decline from the prior year's recorded profits of Rs.328.3 million which Amarasuriya attributed to the escalation of market interest rates. "We have responded to such unfavorable trading conditions by trimming slow moving inventories since our last review and this process will continue until the inventory offered is contained within current demand," Amarasuriya said.

He added that the addition of new brands Samsung and Panasonic 'enhances the range of electronic products on offer island wide while ‘we have sustained the development of distribution channels by strategic opening of new stores in populated locations and loyalty programmes have been expanded at both Singer Mega and Singer Plus channels with increase in membership.'

With late harvest incomes and seasonal buying boosting sales patterns, the 4th quarter is expected to be on forecast, completing an anticipated recovery for the 2nd half year. (NG)