Softlogic group maintains 1Q top line intact beating pandemic odds

Softlogic Holdings PLC maintained its top line intact during the three months to June (1Q22) as its key business verticals such as retail, healthcare and financial services helped the group to overcome pandemic-induced challenges.  

The corporate behemoth with an expansive retail portfolio reported revenues of Rs.24.5 billion in the April-June quarter, up 73 percent from the same period, a year ago, when much of business activity was at a standstill due to more stringent form of lockdown last year. 

A more meaningful comparison made between the preceding quarter ended in March 2021 showed that the group had defended its top line despite month long lockdowns, as the group’s retail businesses witnessed strong April holiday sales while its Asiri group of hospitals provided the defensive cash flow the group required. Its insurance business saw a robust uptake of life and medical covers from people increasingly looking for protection. 
During its fourth fiscal quarter ended March 2021, the group had revenues of Rs.24.7 billion. 

The group reported an operating profit of Rs.2.27 billion in the June quarter compared to a loss of Rs.593.1 million in the year earlier period further reaffirming that the group’s key businesses remained viable and generated cash flows. 

The group’s retail and telecommunication portfolio which includes upmarket retailer, Odel PLC and other luxury brands, consumer electronics division, Glomark supermarket chain and the franchise restaurants generated revenues of Rs.13.5 billion during the quarter, up by a robust 78 percent from the same period last year.

This segment of the business saw solid sales for smartphones, laptops, tablets and other electronic appliances as remote working and learning became the norm again during the quarter with the virus resurgence.

As the group saw strong sales being generated by its e-commerce, Softlogic intends to soon launch a unified mobile app titled, ‘Softlogic One’ bringing all products and services offered by the group under one umbrella. Meanwhile, the group also expressed its intentions to set up a shop in the Port City with its retail and healthcare businesses. 

The group’s healthcare business represented by its expansive Asiri hospitals network generated the highest quarterly revenue of Rs.4.8 billion for the period under review, up 78 percent from the same period last year. 
Meanwhile, the group’s financial cluster comprising of life insurance, finance, asset management, stockbroking and research generated revenues of Rs.4.6 billion, up 48 percent from a year ago. The group’s information technology business made revenues of Rs.1.3 billion, up 89 percent as more businesses are strengthening their IT systems and infrastructure to ensure they have seamless connectivity to all their stakeholders, undisrupted by external events.

“As such, we see a new trend emerging from SMEs which hitherto never made those investments previously,” Softlogic Group Chairman Ashok Pathirage said. 

Meanwhile the group’s leisure and automobile segments generated higher revenues from last year’s levels but its performance is well below potential due to nascent tourism and the import restrictions on vehicles. For the April-June period Softlogic Holdings reported a net loss of Rs.617.8 million or 52 cents a share, down significantly from a year ago period loss of Rs.2.5 billion or Rs.2.08 a share. 

Softlogic Chairman Ashok Pathirage has 40.92 percent stake in the company as the single largest shareholder.