COLOMBO: Branded clothing and accessories seller Odel posted a Rs.74.20 million net profit for the second quarter ended September 30, 2016 (2Q17), a 32.27 percent growth Year-on-Year (YoY), helped by increased sales though pressure from borrowings was observed.
The earnings per share for the quarter improved to 27 cents from 21 cents, while the share ended trade on the bourse at Rs. 21.60 yesterday sliding down slightly from Rs. 21.70 at market opening. Revenue increased 13.92 percent YoY to Rs. 1.82 billion, while cost of sales increased 14.11 percent YoY to Rs. 1.03 billion.
Administrative expenses increased to Rs. 533.31 million from Rs. 467.73 million YoY, while finance costs were recorded at Rs. 56.52 million, up 74.41 percent YoY. Odel’s parent Softlogic Group’s Chairman Ashok Pathirage had expressed some concern over the rising costs of borrowing for the group, given the rising interest rates, during his last annual review.
Odel’s total long-term and short-term interest bearing borrowings increased to Rs. 2.28 billion from Rs.1.75 billion at the start of the financial year, with over half of the borrowings maturing in the short-term. The total asset base of Odel improved to Rs. 9.61 billion from Rs. 9.50 billion during the same period, where the net asset per share improved to Rs. 23.91 from Rs. 23.62.
Odel is currently constructing the one of the country’s largest modern shopping malls with a total investment figure expected to surpass US$ 100 million and a total area exceeding 600,000 square feet.
For the first 6 months of 2016, Odel posted a net profit of Rs. 109.76 million, increasing 20 percent YoY, while the top line expanded 10.69 percent YoY to Rs. 3.31 billion, and the cost of sales rose 7.21 percent YoY to Rs. 1.80 billion. Administrative expenses increased by Rs. 129.85 million YoY to Rs. 1.06 billion, while finance costs increased 60.12 percent YoY to Rs. 102.41 million.
Pathirage’s Softlogic Group controls 97.09 percent of the shares in Odel, and Pathirage had recently said that delisting the company from the bourse is one of the options on the table.
Softlogic would have to divest at least 7.09 percent of its shares before the end of this year to remain listed on the Colombo Stock Exchange, under the public float regulations.
