Singer Chairman Hemaka Amarasuriya has reported "early signs of a market recovery" after last year’s business downturn which hurt production nationwide in the light engineering sector.
He has told shareholders of Singer Industries, a major player in the manufacture of sewing machines, that production had increased in the first quarter of the current financial year ended March 31, 2010 in response to demand and revenue was up 62% from a year earlier.
"Demand was seen to increase in the rural heartland and in the newly emerging markets of the North and East," he said.
With measures taken by the company to rein expenses during last year’s downturn remaining firmly in place, margins too had significantly improved.
However, he expected a gradual increase of raw material prices with the global demand rising as the worldwide economy recovered from the 2009 recession to bring cost pressures on the company in the months ahead.
"A shortage of cast iron will affect the entire foundry industry from which we source sewing machine stands and the resumption of scrap iron exports at the cost of the local foundry industry could have deep seated consequences including loss of jobs, if not curtailed," he warned.
During the first quarter the company’s revenue was up 62.1% to Rs.213.2 million while expenses too grew 55.9% to Rs.200.9 million.
Singer Industries continued to carry a loss share from an associate company although this had reduced from Rs.0.7 million in the first quarter of the last year to Rs.0.5 million in the comparative quarter this year.
The company, turning around from its loss making mode the previous year, posted a Rs.5.6 million net profit in the first quarter of this year against a loss of Rs.0.4 million a year earlier. This turnaround was nearly 1,532%.
"Based on the current trends, the factories will run at full capacity in the second quarter enabling us to maintain the present growth trend up to the half year," Amarasuriya said.
Singer Industries has a stated capital of Rs.38.5 million, reserves of Rs.446.6 million and accumulated profits of Rs.181.7 million in its books with total assets running at Rs.911.3 million and total liabilities at Rs.244.7 million.
Net assets per share were down to Rs.173.33 from Rs.180.55 a year in the first quarter.
The Singer Industries share traded at a high of Rs.125 and a low of Rs.80.25 during the quarter against a trading range of Rs.58.25 to Rs.42 during the comparative period the previous year.
Singer (Sri Lanka) is the dominant shareholder of the company with 83.55% followed by Dr. T. Senthilverl with 7.03%.
Directors of the company are: Mr. Hemaka Amarasuriya (Chairman), Dr. G.C.B. Wijeyesinghe, Deshabandu Ajit Jayaratne, Messrs. Kamal Shah, V.G.K. Vidyaratne, H.A. Pieris, G.J. Walker and A.C.M. Irzan.
Source: The Island
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