PREFACE
WEATHERING THE STORM
Sri Lanka Inc. is coming out of the economic turbulence unscathed
Financial year 2023/24 was one of intense transformation and recovery for Sri Lanka, as the nation pursued its quest for stability amid a volatile local and global environment.
Following the economic turmoil of 2022, Sri Lanka entered the new fiscal year with the challenging task of rebuilding its economy while navigating an array of external and internal pressures.
As the country emerged from the grips of an unprecedented economic crisis, the backdrop for the year’s performance was the implementation of critical reforms, debt restructuring efforts, the extreme challenges of inflation and rising costs, not forgetting the onset of the election season.
For many businesses, 2023/24 was a year of strategic adaptation, as they sought to emerge from a period of unprecedented financial stress and the impact of an economic contraction, while also navigating a wait and see mindset ahead of the country’s decisive elections.
Meanwhile, the nation’s former political leadership navigated complex challenges, introducing several reform measures aimed at stabilising the economy and garnering international confidence. These included austerity measures, tax reforms and measures to attract foreign investment.
While these reforms were met with praise and criticism alike, they underscored a commitment to addressing imbalances and initiating the structural changes needed for sustainable economic growth.
However, a stubborn refusal to address the spread of corruption to new heights turned out to be its downfall.
By November 2024, Sri Lankans elected a new president and government, sparking a surge of public hope for positive change – including a cure for the cancer of bribery and corruption – and raising expectations of a higher standard of living especially among the poor and not so rich.
While the road to recovery hasn’t been linear, the resilience demonstrated by leading corporations throughout this period is undeniable.
Despite the challenges, the corporate sector demonstrated exceptional resilience and adaptability in financial year 2023/24. Many listed companies that made the LMD 100 rankings are examples of this unwavering spirit.
However, corruption remains a major concern due to its pervasive nature. To this end, President Anura Kumara Dissanayake’s commitment to fulfilling promises to tackle the menace and hold wrongdoers accountable raises the bar of hope.
In such an environment, Sri Lanka dropped two places in Transparency International’s (TI) 2023 Corruption Perceptions Index (CPI) to rank 115th. With a score of 34/100, the island shares this spot with Ecuador, Indonesia, Malawi, the Philippines and Turkey among 180 countries.
The 2023 CPI underscores the fact that corruption remains a global challenge with over two-thirds of countries scoring below 50 – an indication of widespread abuse of authority across the world.
Chair of TI François Valérian says: “Corruption will continue to thrive until justice systems can punish wrongdoing and keep governments in check. When justice is bought or politically interfered with, it is the people that suffer. Leaders should fully invest in and guarantee the independence of institutions that uphold the law and tackle corruption.”
Meanwhile, the South Asia Development Update 2024 report titled Jobs for Resilience, published by the World Bank, observes that Sri Lanka’s economy “is returning to growth, as expected…”
The report adds: “A recovery in tourism has boosted growth while also contributing to a substantial improvement in the current account balance. Remittances have also recovered after plummeting in 2021 and 2022 although they remain below pre-pandemic levels.”
In this 31st edition of the LMD 100, Hayleys claims the top spot for financial year 2023/24 – this achievement marks the diversified conglomerate’s return to the pinnacle of Sri Lanka’s version of the Fortune 500. In terms of profitability, Hayleys ranks just outside the top 10 – at No. 11.
Commercial Bank of Sri Lanka (ComBank) is placed second in the pecking order along with securing fifth place for profitability.
And LOLC Holdings holds its No. 3 ranking for the fourth year in a row while advancing from eighth to sixth position in the ranking of the highest bottom lines.
This latest edition of Sri Lanka’s pioneering listed company rankings also reveals that 97 listed corporates (up from 77 in the previous year) posted annual revenues of between Rs. 10 billion and 100 billion rupees. Profitability-wise, 21 companies reported a profit after tax of over Rs. 10 billion.
Overall, the combined revenue of the 100 leading listed entities has grown by a modest four percent with their aggregate bottom lines rising by a healthier 11 percent in the latest rankings.
Launched in 1993/94 as The LMD 50, the latest rankings reveal that half the original top 50 companies no longer appear on the coveted list while an equal number of new listed entities now hold places in the top 50.
Indeed, times have changed!
