Hit on middle-class income overshadows Exterminators’ 1Q performance

E x t e r m i n a t o r s P L C , Sri Lanka’s premier pest management and environmental technology company, has demonstrated resilience during the current crisis. Despite the challenging market conditions, the company has managed to maintain a positive trend in the first quarter of FY23/24, which ended on June 30, 2023.

Undoubtedly, the past quarter presented several challenges for the company. A series of factors, including the significant increase in corporate tax, introduction of VAT and SSCL in the previous quarters and unprecedented rise in personal income tax, have all impacted its revenue streams.

One of its major revenue streams, the middle class, has been badly affected by the significant increase in personal income tax and prevailing inflation. For decades, this segment has been a key contributor, generating approximately one-fourth of its total revenue.

However, the recent hike in personal income tax has significantly reduced the spending power of this crucial demographic.

The company witnessed an increase in revenue by 7 percent, gross profit by 21 percent, operating profit by 126 percent and net profit by 125 percent quarter-on-quarter.

When compared year-on-year, the company experienced a 9 percent increase in revenue and a 2 percent increase in gross profit, with a marginal one percent reduction in net profits. During this period, the company also expanded its operations by setting up a pest management business in London, marking its entry into the UK market. The rigorous standards and compliance requirements in the UK will be applied to its Sri Lankan operations, enhancing its pest management standards and creating more value for its customers, employees and shareholders.