Softlogic delivers blockbuster performance for December quarter amid retail boost

Softlogic Holdings PLC delivered a blockbuster performance for the quarter ended on December 31, 2021 (3Q22), backed by its expansive retail operations, as some product categories ended up exceeding the pre-pandemic festive demand, while others came close to setting new benchmarks in sales performance, reflecting the strong consumer demand during the final three months of 2021. 
The retail behemoth, with an extensive portfolio of products and geographical reach, reported revenues of Rs.16.9 billion for the quarter under review, recording a 44 percent growth over the same period in 2020. 
The EBITDA performance or the earnings before interest, tax, depreciation and amortisation, which measures the business’ cash operational performance, delivered a robust 94 percent increase to report Rs.2.3 billion, reflecting that the group maintained its margins despite the cost pressures coming from cost inflation and foreign exchange troubles. While its apparel and lifestyle products exceeded 2019 pre-pandemic seasonal sales, Softlogic said it could have set a new benchmark in the electronics and smartphones sales, if not for the foreign exchange-related restrictions, which hurt the supplies. 
“As the impact of coronavirus moves towards an endemic, shopping volumes overall increased,” Softlogic Holdings Chairman Ashok Pathirage said in an earnings release. 
“Consumers shifted their priorities spending on products, services and experiences delivered online during the lockdown notwithstanding patronising physical stores. This multi-channel distribution thrust, given the significant size of the customer database, assisted the retail arm to outperform industry,” he added. 

The group, which has interests in other areas such as healthcare, financial services, information technology, leisure and automobile, reported consolidated revenues of Rs.31.9 billion for the October-December period, up 45 percent from the same period in 2020. 
Softlogic share added Rs.4.90 or 7.48 percent yesterday to close at Rs.70.40. 
Accordingly, the group reported earnings of Rs.1.05 a share or Rs.1.25 billion for the December quarter, compared to earnings of 5 cents or Rs.52.25 million in the same period in 2020. 
For the nine months to December, the group reported earnings of 67 cents a share or Rs.799.43 million, compared to a loss per share of Rs.2.96 or Rs.3.53 billion in the corresponding period in 2020. 
During the period the group revenue for the nine months grew by 46 percent to Rs.84.42 billion. 
The group’s hospitals, insurance business and information technology segments did exceptionally well during the quarter, due to the pandemic-fuelled demand, while the leisure sector reflected some signs of top line improvement predominantly coming from local guests at the group’s resort and occupancy in its city hotel by the foreigners. 
While the automobile sector is constrained by the import ban on vehicles, it achieved some revenues primarily led by the ambulance sales to the private and state-led organisations during the quarter. 
As at December 31, 2021, Softlogic Chairman Ashok Pathirage held a 41.29 percent stake in the company while the Employees’ Provident Fund held a 0.61 percent stake being its ninth largest shareholder.
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