“During the year, the company commenced assembling televisions. However, due to the unfavourable tariff structure imposed in the budget for 2011, this operation was discontinued,” SINI Chairman, Hemaka Amarasuriya noted in his message at the release of the firm’s 2010 Annual Report.
According to the Annual Report, SINI have had to absorb a loss on closure of Rs.2.3 million for fixed assets while remaining assembly components would bear a provision against further losses, if any. However, revenue generated from the TV assembly operation was Rs.322 million for the year and the profit after tax generated amounted to Rs.8.6 million.
“Having previously experienced the ‘yoyo’ effect of tariff adjustments, we were cautious in outsourcing this operation to safeguard investments from a consistently changing tariff structure,” Amarasuriya noted.
SINI made a net profit after tax of Rs.118.2 million for the year 2010, compared with a net loss of Rs.33.8 million incurred in the previous year. However, without the gain from revaluating investments, the company incurred a loss of Rs.17.6 million during the year although revenue increased by 37% to Rs.664 million.
“Recovery of consumer markets was clearly visible as a post-war phenomena and this was a year to meet unsatiated demand, locked up previously, while consumers awaited better times. This is signified by a more than doubling of revenue (including revenue from discontinued assembly of televisions) for 2010. North and Eastern markets returned to activity, while across the nation buying trends peaked with the reduction of interest rates and a favourable market environment which encouraged hitherto purchases,” Amarasuriya said in his message.
Meanwhile, according to SINI Group Chief Executive Officer Asoka Peiris, the increase in revenue was as a result of the increased demand for sewing machines due to improvement in market conditions and the marketing done by Singer Sri Lanka Plc.
“In sales volumes, the sewing machine heads increased by 27% while the cabinets and stands had a greater increase. The profit for the year increased to Rs.126.8 million compared to a loss of Rs.33.7 million in the last year. However, the profit is primarily due to change in the fair value of current investments and due to lower payments under the Voluntary Retirement Scheme,” Peiris said.
SINI says it continues to downsize its operations while streamlining sewing operations with a view to enhancing productivity and that a Voluntary Retirement Scheme remains open-ended for those seeking early retirement.
the nation.lk