Business
Softlogic Holdings’ topline records 9 per cent growth for 2QFY21
Extracts from Softlogic Holdings plc’s interim financial statements for the six months ended September 30, 2020
For a consumer-driven conglomerate impacted by the systemic COVID-19 (C19) transmission, the Group’s topline recorded a commendable growth of 9% to Rs. 21.8 Bn 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 1QFY21 with the six-month turnover at Rs. 36 Bn.
Despite the depressed market conditions, Softlogic engaged in vertical integration plans, particularly, in the financial services sector for synergy and industry consolidation purposes. Investments, primarily in retail and healthcare, will translate to greater performance in the upcoming periods when the fear of C19 abates, while consumers adapt themselves to new realities. With growing optimism of the Pfizer and Sputnik vaccines, economic confidence is progressively being normalized with pent-up consumer demand showing signs of rebounding.
There was a fundamental shift in how decisions were made during the lockdown. The management prioritized liquidity, rationalized employment and resources and focused on business recovery while pruning down on all non-essential expenditure and obtaining favourable terms from suppliers for fixed costs such as rent waivers from mall operators. The banks provided loan moratoria to support liquidity while providing working capital loans for the hotels under CBSL’s C19 Renaissance programme.
Primary contributors to Group topline 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.
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. 4 Bn respectively during the quarter. Total operational expenses declined 11% to Rs. 4.8 Bn during the quarter. Cumulative distribution cost declined 20% 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.
(Softlogic Holdings)
Business
USD 57.4m power investment opens new route for SME energy savings
By Ifham Nizam
A USD 57.4 million investment package is set to reshape the economics of electricity for small and medium-sized businesses, while creating a stronger platform for private investment in rooftop solar and other distributed renewable-energy projects.
The financing package—comprising a USD 35 million concessional loan from the Asian Development Bank (ADB), a EUR 15.4 million grant from the European Union (EU), equivalent to USD 16.94 million, and a USD 5.5 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM)—will finance a five-year programme to modernise the electricity distribution system from 2026 to 2030.
For the business community, one of the most significant elements is the planned introduction of Virtual Net Metering (VNM), which will be implemented in the country for the first time.
The EU-funded component will support 25 MW of aggregated rooftop solar PV capacity, specifically aimed at helping reduce the electricity-bill burden of small and medium-scale entrepreneurs.
The move could open a new investment channel for SMEs that have traditionally faced difficulties in absorbing high energy costs and making the upfront investment required for renewable-energy systems.
Rather than viewing rooftop solar simply as a household energy solution, the programme positions distributed solar as an important business-cost management tool.
For SMEs, which operate with considerably tighter margins than many large corporates, electricity expenditure can have a direct impact on competitiveness, cash flow and the ability to expand operations.
By allowing electricity generated from qualifying rooftop solar installations to be applied through a virtual net-metering arrangement, the programme is expected to broaden the economic benefits of solar power beyond individual premises.
The financial significance of the scheme extends beyond the initial 25 MW.
By establishing the infrastructure and regulatory framework required to manage aggregated distributed generation, the project could help create greater investor confidence in the development of decentralised renewable-energy assets.
The investment therefore has the potential to leverage additional private capital into the renewable-energy sector rather than functioning solely as a government-funded infrastructure programme.
The financing package is particularly notable because a substantial portion comes in the form of grants and concessional funding, reducing the cost of financing technologies that would otherwise require significant upfront capital.
The ADB loan will support the wider modernisation programme, while the EU and Japanese grant components will help finance renewable-energy integration and technologies designed to strengthen the grid.
At EDL, the investment will upgrade the existing CEBAssist platform with Advanced Metering Infrastructure (AMI), a Distributed Energy Resource Management (DERM) system and distribution control centres supported by an Advanced Distribution Management System (ADMS).
These systems will give the utility real-time visibility of electricity consumption and distributed generation, allowing it to manage an increasingly decentralised power system more efficiently.
That digital infrastructure is critical to the business case for expanding rooftop solar.
As more SMEs and other consumers generate their own electricity, the distribution network needs to know where generation is taking place, how much electricity is entering the grid and how those flows are affecting local network conditions.
Business
Renault Experience Centre opens at Majestic City
Renault has taken another significant step in its return to the Sri Lankan market with the opening of the Renault Experience Centre at Majestic City, Colombo, offering customers an opportunity to discover the brand and experience its latest models.
The Centre was officially declared open by Jawahar Ganesh, Group Managing Director of Associated Motorways (Private) Limited, accompanied by Prasanna de Silva, Director – Sales, AMW. The occasion was attended by AMW management and staff, members of the media, customers, well-wishers and other invited guests.
Located at the lobby of Majestic City, the Centre features three Renault models being introduced to the Sri Lankan market – the Renault Kwid, Renault Kiger and Renault Triber. Visitors can explore the vehicles, learn about their features and specifications, and take advantage of test drives available at the location.
Adding to the convenience for customers, AMW has ample stocks of Renault vehicles available in Sri Lanka, allowing customers to take delivery of their chosen vehicle without having to wait for months for it to arrive. Subject to completion of the necessary documentation and registration, customers can look forward to driving away in their new Renault within as little as one day, making the purchase experience faster and more convenient.
Customers can also enjoy greater peace of mind with a three-year manufacturer warranty, supported by dedicated Renault aftersales facilities to provide professional service and support throughout their ownership journey.
Commenting on the opening, Jawahar Ganesh, Group Managing Director of AMW, said, “We are delighted to welcome Renault back to Sri Lanka and to open the Renault Experience Centre at Majestic City. Renault is a brand with an exceptional heritage, a strong global presence and a reputation for innovation and distinctive automotive design. Through AMW, we are bringing that heritage and experience closer to Sri Lankan customers”.
Business
Dialog and Indira Cancer Trust continue breast cancer awareness initiative through Yeheli.lk
Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, marked the beginning of Breast Cancer Awareness Month by illuminating its Corporate Head Office in pink, in partnership with the Indira Cancer Trust, to stand in solidarity with individuals and families affected by breast cancer and encourage greater awareness, regular screening and early detection.
Building on previous breast cancer awareness campaigns conducted through Dialog’s Yeheli.lk platform in collaboration with the Indira Cancer Trust, this year’s initiative will continue throughout October under the theme, ‘A Pledge from the Heart’. As part of the campaign, members of the public can visit yeheli.lk to register for a free monthly SMS reminder and take their pledge for early detection throughout Breast Cancer Awareness Month.
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