Business
Weak demand for consumer electronics expected to continue for another 12-18 months
‘Consumer income has yet to adjust to the higher cost of living’
‘Increase in taxes in early 2023 has weakened purchasing power’
by Sanath Nanayakkare
The electronic products sales market in Sri Lanka is expected to show sustained weakness in the next 12-18 months due to prolonged weak demand, according to a report from Fitch Ratings.
Fitch expects Sri Lanka’s GDP to contract by 1.4% in 2023 (2022: 7.8% decline), before growing modestly by 3.3% in 2024, indicating only a gradual recovery in economic activity.
“Consumer income has yet to adjust to the higher cost of living while the increase in taxes in early 2023 weakened purchasing power”, Fitch states.
The ratings agency expects sales volumes of Singer Sri Lanka, the foremost consumer durables retailer in the country, to rise in the low single digits in the financial year 2024.
The report titled, ‘Fitch Downgrades Singer (Sri Lanka) PLC to ‘A(lka)’; Outlook Stable’, the agency points out that the downgrade reflects the sustained deterioration in Singer’s financial profile such that Fitch-forecasted EBITDAR fixed-charge cover will fall to 0.7x in the financial year ending 31 March 2024 (FY24), compared with 1.1x in FY23.
“The Stable Outlook reflects Singer’s adequate liquidity supported by its access to domestic banks. We expect that the company’s EBITDA will recover gradually in the next two years supported by a slow improvement in demand amid falling interest rates and the removal of the ban on consumer durable imports since October 2023,” Fitch says.
However, Fitch doesn’t expect Singer Sri Lanka’s fixed charge cover to improve to above 1.2x – the level commensurate with a higher rating – until after FY25.
“We forecast Singer’s sales volumes to grow by double digits in FY25, due to a gradual recovery in income supported by a revival in the agriculture sector, which accounts for 30% of the population, salary increments across the public and private sectors, and a full year’s impact of pent-up demand after the removal of a ban on consumer-durables imports in October 2023. Hire-purchase (HP) and credit sales should also rise with interest rates almost halving from the highs in FY23, and we expect Singer will selectively grow its HP book, which shrank in the last few years, to cater to this demand. We expect Singer’s EBITDAR margin to improve to around 9% in FY25, from 3.3% in 1HFY24, benefitting from revenue growth, prudent inventory management, and a shift towards high-margin product categories.
“We estimate Singer’s cash interest to reduce by 35% in FY24 as interest rates fall. Market interest rates have fallen to 13% by November 2023, from 30% a year ago. Given most of Singer’s debt is short-term, the company should be able reprice faster at favourable rates. However, we do not believe Singer’s EBITDAR generation in FY24 will be sufficient to cover the reduced interest cost,” Fitch says.
According to the report, Singer’s rating is not notched for support from its stronger parent, Hayleys PLC, as they believe Hayleys has limited incentive to provide support according to their Parent and Subsidiary Linkage Rating Criteria.
“The ‘Low’ legal incentive stems from the absence of corporate guarantees from Hayleys on Singer’s debt, and the lack of cross-default clauses between the two entities. Hayleys is a highly diversified group, resulting in limited operational synergies with Singer. Furthermore, Singer has an independent management team and its brand is separate from that of Hayleys. Therefore, the operational incentive to support is also regarded as ‘Low’, Fitch says.
The Central Bank of Sri Lanka today (07) presented its flagship publication, the Annual Economic Review for 2024 (AER 2024), to President and Minister of Finance, Anura Kumara Disanayake, highlighting the steady progress of Sri Lanka’s economic recovery following the country’s most severe downturn in recent history.
The report was officially handed over by Dr. P. Nandalal Weerasinghe, Governor of the Central Bank, during a special ceremony held at the Presidential Secretariat.
AER 2024 comprises four main chapters: Macroeconomic Developments, Conditions of the Financial System, Review of Central Bank’s Policies and Macroeconomic Outlook.
According to the Review, the Sri Lankan economy showed significant signs of recovery in 2024, following the deep economic crisis experienced two years ago. The recovery trajectory, though challenging, has been notably faster than that of many other debt-distressed countries.
Improvements in economic activity, a partial resurgence in purchasing power and reduced uncertainty are among the key positive indicators noted in the report.
The event was attended by Dr. Nandika Sanath Kumanayake, Secretary to the President, K. M. Mahinda Siriwardena, Secretary to the Treasury, Mrs. K. M. A. N. Daulagala, Senior Deputy Governor, Dr. C. Amarasekara, Assistant Governor, Dr. (Mrs.) S. Jegajeevan, Director of Economic Research and Dr. L. R. C. Pathberiya and Additional Director of Economic Research at the Central Bank Dr. V. D. Wickramarachchi.
[PMD]
Business
IceWarp expands into Sri Lanka, fostering European innovation in collaboration with FentonsIT
IceWarp, a global leader in business communication solutions, has officially launched its cutting-edge platform in Sri Lanka, bringing European expertise in email and collaboration solutions to support the country’s evolving business landscape.
This expansion is driven by a strategic partnership with Fentons Information Technology (FIT), the Information Technology arm of Hayleys Fentons Limited.
The grand launch event held at The Kingsbury Colombo on 4th April, 2025, was graced by several distinguished guests, including Chief Guest Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC.
The presence of Adam Paclt, Global CEO of IceWarp, and Pramod Sharda, CEO for India and the Middle East of IceWarp, along with their global team, highlighted the significance of this expansion. Industry experts, government officials, corporate leaders, and CIOs from the banking, financial services and insurance sectors were in attendance as well, reflecting strong local interest in IceWarp’s European expertise.
With this launch, Sri Lankan businesses now have access to an affordable, scalable and secure alternative to Microsoft 365 and Google Workspace. IceWarp’s advanced Collaboration Suite integrates a wide range of tools into a single, unified platform designed to streamline communication and boost productivity. Offering flexible hybrid deployment options and cost-efficient solution, IceWarp enables organisations to optimise their operations without compromising security or functionality.
Ceylon Energy and HJT China have successfully completed the Mahiyangana-Kappalthurei 33kV power distribution lines and the Uhana Gantry as part of Sri Lanka’s Supporting Electricity Supply Reliability Improvement Project (SESRIP). Funded by the Asian Development Bank ($42 million), SESRIP aims to expand energy access in underserved regions, including conflict-affected areas and provinces like Uva and North Central.
The project’s infrastructure spans over 270 km of 33kV lines, 13 switching gantries, and 2,372 km of low-voltage extensions.
The projects connect 35,000+ households and improve reliability for 493,000+ consumers; integrates renewables to reduce losses.
The projects’ notable components include: Mahiyangana-Bibila Line: 36 km with 147 steel towers and Kappalthurei-Sixth Mile Post Line: 14 km with 58 towers.
Ceylon Energy Chairman Madushanka Fernando hailed it as a ‘new beginning of a brighter era’, emphasising the project’s role in uplifting rural communities and driving sustainable development.
The initiative underscores Sri Lanka’s commitment to inclusive, reliable energy and climate resilience.
Advisory for severe lightning issued for Sabaragamuwa, Central and Uva provinces and in Hambanthota district
Rains add to misery in quake-hit Myanmar as death toll rises to 3,471
Zimbabwe to scrap tariffs on US goods as it faces 18% Trump levy
-
Business16 hours agoColombo Coffee wins coveted management awards
-
Features2 days agoStarlink in the Global South
-
Business3 days agoDaraz Sri Lanka ushers in the New Year with 4.4 Avurudu Wasi Pro Max – Sri Lanka’s biggest online Avurudu sale
-
Business4 days agoStrengthening SDG integration into provincial planning and development process
-
Business3 days agoNew SL Sovereign Bonds win foreign investor confidence
-
Sports5 days agoTo play or not to play is Richmond’s decision
-
Features2 days agoModi’s Sri Lanka Sojourn
-
Sports4 days agoNew Zealand under 85kg rugby team set for historic tour of Sri Lanka