Singer Finance PLC has recorded a Profit before Tax of Rs 85.4 million for the first quarter of the 2011/12 financial year, which represents a growth of 63 percent over the previous year. The company’s numbers were buoyed by an increase in the leasing and hire purchase portfolio, which accounted for 57 percent of the revenue for the quarter.
The lease and hire purchase segments achieved an operating profit margin of 30 percent and 32 percent respectively during this quarter, an increase from 19 percent achieved by each of these segments last year.
Further augmenting the profit before tax is the steady control of costs. "We’ve displayed an admirable ability to control costs in relation to revenue, demonstrated by an operating costs-to-income ratio of 42%, down from 45% last year. We expect this to continue due to the high business volumes expected for this financial year," said Shantha Wijeweera, CEO, Singer Finance.
Non-Performing Loans (NPL) ratio was 0.5 percent during the quarter, while the risk weighted capital ratio stood at 20.6 percent, well above the minimum regulatory requirement of 10%.
"We are optimistic about the demand for vehicle financing products to continue during the year given the lower tariff structure and stable interest rates. In addition, we are finalizing expansion plans on previously untapped markets such as the Northern Province. We’ve already opened a window operation in Vavuniya in that regard," Wijeweera said.
Further, the company announced that it had changed its method of estimating Provision for Bad and Doubtful Debts with effect from 1st April 2011. This was done to be in line with Central Bank Sri Lanka’s (CBSL) Direction No. 3 of 2006 on Bad and Doubtful Debts. In accordance with the Sri Lanka Accounting Standard 10 – Accounting, Polices, Changes in Accounting Estimate and Errors - the reversal of the over provision for Bad and Doubtful Debts as at 1st April 2011 amounting to Rs.13.1 Ml was also recognised in the current period income statement.
Singer Finance (Lanka) PLC (SFLL), a subsidiary of singer (Sri Lanka) PLC (SSL), was incorporated on 19th April 2004 to carry out finance business within the provisions of the Finance Companies Act No.78 of 1988 as amended by Act No.23 of 1991. SFLL obtained the License from Central Bank of Sri Lanka to carry out Finance Leasing business and licensed as a registered "Finance Company" in terms of section 2 of the Finance Companies Act No.78 of 1988. The company’s asset base currently exceeds Rs 4.8 billion and enjoys a market capitalization of Rs 3.18 billion.
source - www.island.lk
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