Showing signs of a turnaround, Softlogic Holdings Plc (SHL) has witnessed a renewed business revival, recording improved financial performance in core sectors in the third quarter of FY23 amidst ongoing challenges.
SHL saw consolidated revenue growth of 4.2% to Rs. 75.6 Bn during the nine-month period under review, while the quarter recorded revenue growth of 9.3% to Rs. 27.6 Bn.
During the cumulative period, the Retail sector contributed 34% to Group revenue, while Healthcare Services made up 28%. 27% of the Group topline was generated from Financial Services, while 7% was from the IT sector. Leisure & Property and Automobile together accounted for 3.1% of Consolidated revenue.
Gross Profit declined 4.6% to Rs. 25.5 Bn during the cumulative period as a result of GP margin contraction from 36.9% to 33.8%. SHL said this margin contraction was particularly led by the import-oriented sectors, which witnessed a rapid cost increase amid local and global inflation and Rupee depreciation.
However, positive economic developments supported the Group in registering a GP margin improvement due to inflation containment and strengthening of the Rupee during the quarter, increasing from 34.4% to 36.2%, resulting in quarterly Gross Profit reaching Rs. 10 Bn, up 14.8%.
The Group achieved EBITDA growth of 82% to Rs. 4 Bn during the quarter, while cumulative EBITDA was Rs. 7 Bn. Cost optimization initiatives, coupled with inflation contraction, led to a 7.1% decline in quarterly operating costs to Rs. 7.4 Bn, as opposed to Rs. 7.9 Bn recorded in the comparative quarter.
Operating cost margins improved from 11% in 3QFY23 to 9.8% in 3QFY24. Subsequently, quarterly operating profit was Rs. 3 Bn, compared with Rs. 1.2 Bn in the corresponding quarter. Cumulative operating profit was Rs. 3.8 Bn.
Finance Income, predominantly derived from the insurance business’s investment income, was Rs. 6.1 Bn for the cumulative period, while Rs. 1.8 Bn was recorded for the quarter.
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