HomeLocal NewsBusinessSoftlogic returns to profits in FY22 despite the economic crisis

    Softlogic returns to profits in FY22 despite the economic crisis

    Softlogic Holdings PLC has announced strong results across all business verticals in FY22 amidst heightened market volatility and economic woes.

    Consolidated Annual Revenue surged by 35% to Rs. 111.2 billion and consolidated Gross Profit for FY22 improved 52% to Rs. 39 billion while Group EBITDA recorded a rise of 98% to Rs. 19.7 billion in FY22. Softlogic said that was primarily resulting from increased topline and stringent cost discipline.

    The Group witnessed exchange losses in the Retail, Leisure and IT sectors during 4Q FY22 due to the depreciation of the rupee. Net finance costs for the year, excluding exchange losses and gains, declined 13% to Rs. 4.9 billion due to the low-interest rate regime.

    Group PBT for the year recorded a nearly two-fold increase to Rs. 3 billion compared to a loss of Rs. 3.2 billion in FY21. Group PAT for FY22 achieved a 126% growth in profitability to Rs. 880 million in comparison to a loss of Rs. 3.4 billion in FY21.

    Softlogic said revenue for Healthcare Services witnessed a 41% increase to Rs. 22.4 billion. The sector recorded an EBITDA growth of 75% to Rs. 7.2 billion in FY22 while closing the year with a PAT of Rs. 3.8 billion up 117% from FY21.

    Few brands in Softlogic retail business

    The Retail sector recorded revenue growth of 33% to Rs. 57.8 billion during FY22 while EBITDA saw an increase of 274% to Rs. 7.4 billion. 

    Softlogic Life Insurance achieved a growth of 25% to Rs. 21 billion in FY22. The company said Gross Written Premium growth has been underpinned by steady demand for life and health products. The company achieved a PAT of Rs. 2.2 billion. 

    Softlogic Finance witnessed a growth of 147% in Net Interest Income to Rs. 1.4 billion during FY22. Total Deposits rose 7% to touch Rs. 15.6 billion while total assets improved 23% to Rs. 25.6 billion. The credit rating of the company was upgraded to (SL)BB Stable by ICRA Lanka during the quarter. The Financial Services sector achieved a topline growth of 27% to Rs. 23 billion in FY22 while PAT registered a growth of 170% to Rs. 1.3 billion for the year.

    Commenting on the Group’s outlook Softlogic Holdings Chairman Ashok Pathirage said with the interlude of the current economic turmoil navigating through these uncertain times, especially for the retail sector, which is import-reliant, must be considered with a thinking that is outside-the-box. 

    “Therefore, we are looking at venturing offshore and setting up onshore assembly plants to supplement the dire need for forex generation as a means to rebalance competing ends. The duty barriers and increase in taxes which are a disincentive to consumers has to be reckoned with due to diminishing purchasing power,” Pathirage said. 

    “As we focus on premium and luxury brands, consumer behaviour generally runs inversely to normal demand and supply pricing. With more brand awareness, the trade-off between shrinking consumer income and maintaining brand consciousness would be a challenge. To overcome this, local brands are being developed creatively to substitute for the demand for imported brands,” Softlogic Chief revealed. 

    “The economic situation behoves that we broad base our investments and focus on local manufacturing to complement import substitution where other nations through such investments have gained competitive advantages. Softlogic is mindful of adapting fast and meeting these new challenges,” Pathirage added. 

    Soflogic Chairman Ashok Pathirage

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