Economic slippages, high interest rates in challenging times-Softlogic

Economic slippages, high interest rates and taxes plus a weakened rupee poses many challenges resulting in a further erosion in consumer demand and market sentiment in Sri Lanka, the head of a top consumer goods conglomerate said this week.

Reporting the company’s financials for a 3-month period ending June 2018, Softlogic Holdings Plc Chairman Ashok Pathirage said that revenue grew 5.1 per cent to Rs. 16 billion during 1QFY18 amidst subdued purchasing power of consumers.

He said the retail sector witnessed an ownership restructure in March 2018 with the creation of a sector holding company, Softlogic Retail Holdings (Pvt) Ltd.

This exercise aims to bring better clarity and focus in the retail sector. Softlogic Group reclassified its operating sectors under four prime business verticals -Retail, Healthcare and Financial Services; while Leisure and Automobiles were classified as non-core. The IT companies will be transferred to the Retail sector in due course.

The report said the core verticals emerged to be the top contributors of group topline with Retail contributing 51 per cent, Healthcare Services 20 per cent and Financial Services 19 per cent.

Gross profit improved 4.7 per cent to Rs. 5.8 billion.

Operating profit increased mar- ginally by 1.7 per cent to Rs. 1.9 billion during the quarter. Nonetheless, operating profit margins remained unchanged at 12 per cent during the three months under review.

Post tax profit for the period was Rs. 388.5 million.

“The branded fashion segment continued its steady pace amidst challenging economic conditions. Our 40,000 sq. ft space in Colombo City Centre will house Body Shop, Fossil, Aldo, Mango, Luxe Bags, Charles & Keith, Swarovski, Armani Exchange, Mothercare, Galleria, Jack & Jones, Clarks, Odel Department s t o re and Odel Spor t s Department to be opened end-August,” the chairman said.

Consumer Durables network stands with 220 stores around the country with the latest Samsung Concept store being opened in Colombo 5. “We now have a total retail space of around 310,000 sq. ft in the Consumer Durables business,” he said.

“We are currently setting up our supermarket operation which we reckon to have substantial growth potential. Supermarket is a natural extension of our retail business where we hope to capture more market share in the retail wallet under one loyalty platform of ’ Spend and Burn points’ across all Softlogic companies. The Odel Mall project is ongoing and is scheduled to be completed by 2020,” he said.

Asiri Health, which has continuously invested in cutting- edge medical solutions, will soon unveil one of Sri Lanka’s most advanced cancer treatment centres, Asiri AOI Cancer Centre, in October. This centre will comprise the most modern linear accelerator with true beam radiotherapy, radio iodine treatment for cancer of thyroid and thyrotoxicosis, chemotherapy, a surgery unit, nuclear medicine department with PET scan and Gamma camera for diagnosis, treatment and follow-up of cancer patients.

Asiri Kandy Hospital, the 180bed multi-specialty hospital in the Central Province is slated to open early next year.