Sarvodaya Development Finance maintains growth momentum in 1H

Chairman Channa de Silva

CEO Nilantha Jayanett

Sarvodaya Development Finance PLC (SDF) said yesterday it continued its growth streak for the first half of the financial year 2022-23, despite challenging market conditions. 

SDF reported a net profit of Rs. 72.9 million, which is a growth of 43.0% from the Rs. 51.0 million profit reported for the first half of the financial year 2021-22. 

The Company distributed 70% dividends from its after-tax profits for the financial Year 2021/22. Out of this, Rs. 70 million was directed towards rural development through Sarvodaya related entities and village societies, despite existing economic challenges.

SDF’s total income for the six-month period ending September 2022 overshot the billion mark, reaching Rs. 1.18 billion, which is a growth of by 44.8%  from September 2021. The Company’s primary source of revenue, which is interest income from Agri-machinery and equipment leasing, expanded by 58.6% reaching Rs. 542.72 million by end-September 2022. The income from loans achieved a 19.4% growth reaching Rs. 513.23 million. Income from other businesses grew by 287% to Rs 54.23 million by end September 2022.  Backed by strong income growth, SDF’s Profit Before Tax grew by 59.8% to Rs. 96.46 million. 

However, the lower demand for new credit facilities within the rising-interest regime and generally sluggish economic conditions, caused the Company’s asset base to decline by 1.8% at the end of the second quarter, from the start of the first quarter.  The Company’s excellent financial performance was backed by continually improving recoveries which is over performing compared to industry average collection ratios. 

As the financial services provider of the Sarvodaya Movement, SDF believes in creating self-sustaining village economies. While adopting a prudent approach towards business expansion under the existing economic conditions, SDF has continued to honour its mission to empower villages by developing alternate economic solutions within the current crisis, to uplift village communities.  

The Company’s unique agri-business model continued to support Sri Lankan farming communities not only with essential funds, but also through access to farm equipment. SDF’s ongoing exclusive MoUs with agricultural equipment suppliers such as DIMO and Hayleys, have ensured that domestic farmers can access modern farming equipment that have contributed towards significant improvements in agricultural productivity. 

SDF also significantly increased its contribution to the national exchequer with a sharp increase in Value Added Tax (VAT) and Income Tax payments.  The VAT payment on Financial Services increased by 52.5%, from Rs. 37.91 million in September 2021, to Rs. 57.80 million, and the Income Tax pay out increased by 151.7% from Rs. 9.34 million to Rs. 23.50 million as at end-September 2022. 

Having concluded an exceptionally strong first half, SDF looks forward to contributing further towards the country’s recovery during the financial year 2022-23.