Softlogic Group posts growth of 9% to Rs. 21.8 bn | Daily News

Softlogic Group posts growth of 9% to Rs. 21.8 bn

Chairman Softlogic Group,  Ashok Pathirage
Chairman Softlogic Group, Ashok Pathirage

For a consumer-driven conglomerate impacted by the systemic COVID-19(C19) transmission, the Softlogic Group’s top line recorded a commendable growth of 9% to Rs. 21.8 billion for 2QFY21 which defied expectations with performance exceeding the two preceding negative quarters.

Performance of the 1HFY21 was severely affected by the two-month lockdown in 1QFY21with the six-month turnover at Rs. 36 Bn.

Primary contributors to Group top line for the cumulative period were Retail (52% contribution), Financial Services (22%), Healthcare Services (20%), IT (5%) followed by the non-core sectors --Automotive and Leisure & Property.

Gross Profit for the quarter was Rs. 7.2 Bn while 1HFY21 reached Rs.11 Bn. “It should be noted that expectations of significant revenue growth following our recent investments, particularly in the retail sector, would have been achieved if businesses had operated under normal circumstances. The implications of all this, despite the increase in cost of sales, is that the gross profit margins would have further increased as consequence of an increase in aggregate turnover ensuring better bottom-line contribution,” said Chairman Softlogic Group, Ashok Pathirage.

Other Operating Income, which comprise recurrent and non-recurrent income such as investment income, fee and commission generated from retail and financial services, increased 58% to Rs. 213 Mn 2QFY21 while 1HFY21 recorded a 27% growth in other operating income to Rs. 416 Mn.

Stringent cost control measures executed during this phase resulted in distribution and administrative expenses declining 14% and 10% to Rs. 784 Mn and Rs. 4Bn respectively during the quarter.

Total operational expenses declined11% to Rs. 4.8 Bn during the quarter. Cumulative distribution cost declined20% to Rs. 1.4 Bn while a 5% deduction in administration costs to Rs. 8.1 Bn was noted during 1HFY21.

Total operational cost for the cumulative period reduced 8% to Rs. 9.5 Bn. Operating profit for the quarter increased 36% to Rs. 2.5 Bn amidst the setbacks witnessed during the 1QFY21. “This clearly signals a return to normalization when the environment improves. Group EBITDA improved 35% to Rs. 3.5 Bn during the quarter while cumulative EBITDA for 1HFY21 was Rs. 3.8 Bn.” “We are optimistic that while “all things shall pass” businesses will become stronger because of the determination to navigate intelligently through the pandemic”.