Softlogic : Interim Financial Statment for the period ended 31st March 2022

SOFTLOGIC HOLDINGS PLC

INTERIM FINANCIAL STATEMENTS FOR THE TWELVE MONTHS ENDED 31 MARCH 2022

Performance Highlights

Financial Year Ended 31st March 2022

		Revenue			EBITDA
Rs. Million	FY22	FY21	% Change	FY22	FY21	% Change
Retail & Telecommunication	57,840	43,449	33%	7,367	1,967	274%
Healthcare Services	22,352	15,799	41%	7,236	4,146	75%
Financial Services	22,597	17,859	27%	3,781	3,526	7%
Information Technology	6,708	4,285	57%	1,014	545	86%
Leisure & Property	1,226	648	89%	(75)	(494)	-85%
Automobiles	504	571	-12%	99	19	430%
Others	6	10	-40%	216	708	-69%
Group	111,233	82,621	35%	19,652	9,908	98%

Financial Review

• The Group's financial performance for FY22 reflects strong results across all business verticals amidst heightened market volatility and economic woes. Consolidated Annual Revenue surged reaching Rs. 111.2 Bn (up 35%).
• Consolidated Gross Profit for FY22 improved 52% to Rs. 39 Bn while Group EBITDA recorded a rise of 98% to Rs.19.7 Bn during FY22. This was primarily resulting from increased topline and stringent cost discipline.
• The Group witnessed exchange losses at Retail, Leisure and IT sectors during 4QFY22 due to the depreciation of the Rupee. Net finance costs for the year, excluding exchange losses and gains, declined 13% to Rs. 4.9 Bn due to the low interest rate regime.
• Group PBT for the year recorded a near two-fold increase to Rs. 3 Bn, compared to a loss of Rs. 3.2 Bn in FY21.
• Group PAT for FY22 achieved a 126% growth in profitability to Rs. 880 Mn in comparison to a loss of Rs.
• 1. Bn in FY21.
• Revenue for Healthcare Services witnessed a 41% increase to Rs. 22.4 Bn. Sector recorded an EBITDA growth of 75% to Rs. 7.2 Bn in FY22 while closing the year with a PAT of Rs. 3.8 Bn (up 117%).
• Retail sector recorded a revenue growth of 33% to Rs.
• 1. Bn during FY22 while EBITDA saw an increase of 274% to Rs. 7.4 Bn.

Future Outlook

• 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 off-shore 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. 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.
• The economic situation behooves that we broadbase 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.

• Softlogic Life Insurance achieved a growth of 25% to Rs. 21 Bn in FY22. GWP growth has been underpinned by steady demand for life and health products. The company achieved a PAT of Rs. 2.2 Bn. Softlogic Finance witnessed a growth of 147% in Net Interest Income to Rs. 1.4 Bn during FY22. Total Deposits rose 7% to touch Rs. 15.6 Bn while total assets improved 23% to Rs. 25.6 Bn. The credit rating of the company was upgraded to (SL)BB Stable by ICRA Lanka during the quarter. Financial Services sector achieved a topline growth of 27% to Rs. 23 Bn in FY22 while PAT registered a growth of 170% to Rs. 1.3 Bn for the year.

Softlogic Holdings PLC

CONSOLIDATED INCOME STATEMENT

	Un-audited	Audited	Change	Un-audited	Un-audited	Change
	12 months to	12 months to	as a	03 months to	03 months to	as a
In Rs. '000	31-03-2022	31-03-2021	%	31-03-2022	31-03-2021	%
Continuing operations
Revenue from contract with customers	89,129,624	65,148,831	37	20,651,099	19,748,216	5
Revenue from insurance contracts	19,165,724	15,066,694	27	5,291,070	4,320,853	22
Interest income	2,937,818	2,405,067	22	867,401	644,368	35
Total revenue	111,233,166	82,620,592	35	26,809,570	24,713,437	8
Cost of sales	(72,238,456)	(57,027,362)	27	(14,843,182)	(17,919,022)	(17)
Gross profit	38,994,710	25,593,230	52	11,966,388	6,794,415	76
Other operating income	1,341,707	821,510	63	475,535	308,375	54
Distribution expenses	(3,630,263)	(3,142,400)	16	(1,134,577)	(1,309,388)	(13)
Administrative expenses	(20,909,687)	(17,020,294)	23	(7,065,506)	(4,218,791)	67
Results from operating activities	15,796,467	6,252,046	153	4,241,840	1,574,611	169
Finance income	4,461,090	3,018,273	48	2,117,478	1,158,129	83
Finance expenses	(12,666,716)	(8,401,804)	51	(6,583,240)	(2,099,201)	214
Net finance cost	(8,205,626)	(5,383,531)	52	(4,465,762)	(941,072)	375
Change in fair value of investment property	140,100	98,500	42	140,100	98,500	42
Share of profit/ (loss) of equity accounted
investees	(11,750)	(23,697)	(50)	83	(2,412)	(103)
Change in insurance contract liabilities	(4,713,849)	(4,111,061)	15	(1,695,598)	(1,125,176)	51
Profit/ (loss) before tax	3,005,342	(3,167,743)	(195)	(1,779,337)	(395,549)	350
Tax expense	(2,124,904)	(197,158)	978	(436,383)	51,734	(944)
Profit/ (loss) for the period	880,438	(3,364,901)	(126)	(2,215,720)	(343,815)	544
Attributable to:
Equity holders of the parent	(2,064,885)	(4,583,848)	(55)	(2,864,312)	(1,199,169)	139
Non-controlling interest	2,945,323	1,218,947	142	648,592	855,354	(24)
	880,438	(3,364,901)	(126)	(2,215,720)	(343,815)	544
Earnings/ (loss) per share
Basic	(1.73)	(3.84)	(55)	(2.40)	(1.01)	139

Note : Figures in brackets indicate deductions.

The above figures are not audited unless otherwise stated.

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Softlogic Holdings PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Un-audited	Audited	Change	Un-audited	Un-audited	Change
	12 months to	12 months to	as a	03 months to	03 months to	as a
In Rs. '000	31-03-2022	31-03-2021	%	31-03-2022	31-03-2021	%
Profit/ (loss) for the period	880,438	(3,364,901)	(126)	(2,215,720)	(343,815)	544
Other comprehensive income
Continuing operations

Other comprehensive income to be reclassified to income statement in subsequent periods

Currency translation of foreign operations	(59,791)	(34,052)	76	(64,480)	(8,615)	648
Net change in fair value on derivative financial instruments	(2,888,357)	(168,590)	1,613	(2,808,777)	(297,456)	844
Net income/ (loss) on financial instruments at fair value through
other comprehensive income	(592,267)	162,543	(464)	(263,478)	(58,075)	354
Net other comprehensive loss to be reclassified to income
statement in subsequent periods	(3,540,415)	(40,099)	8,729	(3,136,735)	(364,146)	761

Other comprehensive income not to be reclassified to income statement in subsequent periods

Revaluation of land and buildings	7,726,097	1,061,153	628	7,689,072	1,061,153	625
Re-measurement gain/ (loss) on employee benefit liabilities	(996)	(45,152)	(98)	9,107	(49,800)	(118)
Share of other comprehensive profit/ (loss) of equity accounted
investments (net of tax)	(327)	287	(214)	(327)	287	(214)
Net profit/ (loss) on equity instruments at fair value through
other comprehensive income	(647,981)	(300,918)	115	(367,778)	51,665	(812)
Tax on other comprehensive income not to be reclassified to
income statement in subsequent periods	(1,098,891)	593,823	(285)	(1,098,891)	(13,479)	8,053
Net other comprehensive income not to be reclassified to
income statement in subsequent periods	5,977,902	1,309,193	357	6,231,183	1,049,826	494
Other comprehensive income from continuing
operations for the period, net of tax	2,437,487	1,269,094	92	3,094,448	685,680	351
Total comprehensive income/ (loss) for the period, net
of tax	3,317,925	(2,095,807)	(258)	878,728	341,865	157
Attributable to:
Equity holders of the parent	(784,854)	(3,664,240)	(79)	(1,268,301)	(476,158)	166
Non-controlling interest	4,102,779	1,568,433	162	2,147,029	818,023	162
	3,317,925	(2,095,807)	(258)	878,728	341,865	157

Note : Figures in brackets indicate deductions.

The above figures are not audited unless otherwise stated.

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Softlogic Holdings PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Un-audited	Audited
	as at	as at
In Rs. '000	31-03-2022	31-03-2021
ASSETS
Non-current assets
Property, plant and equipment	61,060,959	53,522,589
Investment property	2,157,217	1,913,880
Right of use assets	8,296,184	6,015,883
Intangible assets	8,460,694	8,743,639
Investments in equity accounted investments	44,803	56,879
Non-current financial assets	28,197,322	20,983,765
Rental receivable on lease assets and hire purchase	10,134,738	4,596,942
Other non-current assets	7,644,237	5,483,366
Deferred tax assets	2,613,720	3,403,359
	128,609,874	104,720,302
Current assets
Inventories	13,273,976	12,631,624
Trade and other receivables	13,051,297	12,355,587
Loans and advances	7,122,288	8,989,576
Rental receivable on lease assets and hire purchase	1,049,158	665,762
Amounts due from related parties	2,430	2,274
Other current assets	4,274,449	3,725,846
Short term investments	15,062,781	12,243,650
Cash in hand and at bank	9,146,969	7,580,957
	62,983,348	58,195,276
Total assets	191,593,222	162,915,578
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Stated capital	12,119,235	12,119,235
Revenue reserves	(14,050,959)	(11,976,552)
Other components of equity	5,928,444	5,681,762
	3,996,720	5,824,445
Non-controlling interests	14,247,393	12,421,760
Total equity	18,244,113	18,246,205
Non-current liabilities
Insurance contract liabilities	22,559,123	17,947,994
Interest bearing borrowings	38,865,856	38,200,549
Lease liabilities	5,928,618	4,117,610
Public deposits	2,568,633	3,035,139
Deferred tax liabilities	3,465,574	2,323,342
Employee benefit liabilities	1,708,747	1,594,029
Other deferred liabilities	1,486	3,604
Other non-current financial liabilities	738,829	832,106
	75,836,866	68,054,373
Current liabilities
Trade and other payables	23,124,839	18,815,377
Amounts due to related parties	28,919	31,992
Income tax liabilities	344,199	66,123
Other current financial liabilities	35,535,336	25,925,388
Current portion of interest bearing borrowings	15,026,366	11,840,103
Current portion of lease liabilities	1,610,321	1,409,733
Other current liabilities	2,148,571	940,565
Public deposits	13,015,045	11,545,678
Bank overdrafts	6,678,647	6,040,041
	97,512,243	76,615,000
Total equity and liabilities	191,593,222	162,915,578

I certify that the financial statements comply with the requirements of the Companies Act No. 7 of 2007.

-sgd-

Group Finance Director

The Board of directors is responsible for the preparation and presentation of these financial statements.

-sgd-	-sgd-
Chairman	Director
03 June 2022
Colombo

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