PREFACE
THE TEST OF RESILIENCE
Sri Lanka’s leading listed corporates come under the radar
Financial year 2022/23 will be remembered as an exceptionally challenging period for Sri Lanka’s economy and businesses alike, marked by the implementation of a rigorous tax regime, the initiation of the domestic debt restructuring (DDR) programme and protracted negotiations with the IMF.
So much so that to describe the year as being ‘tumultuous’ would be an understatement!
However, as calendar year 2023 draws to a close, there’s a glimmer of hope on the horizon despite the rocky beginning. The economic environment is gradually improving and there’s a sense that the worst is behind us – albeit that the list of sensitivities ahead of the New Year continue to mount with every passing week and month.
As a media house, we have maintained over the years that Sri Lanka’s status as a failed (at times) or failing (more often than not) state is primarily due to the spread of corruption… to unimaginable levels.
Today, the rot has spread to well beyond the murky waters of where our politicians are housed to just about everywhere else – and sadly, there’s seemingly no turning back.
That said, Sri Lanka’s ranking in Transparency International’s (TI) 2022 Corruption Perceptions Index (CPI) improved by a notch, moving up one place to No. 101 compared to the previous year. The 2022 CPI underscored a global challenge by revealing that a majority of countries are struggling to combat corruption effectively.
“Corruption undermines governments’ ability to protect people and erodes public trust, provoking more and harder to control security threats. On the other hand, conflict creates opportunities for corruption and subverts governments’ efforts to stop it,” says TI.
The independent watchdog adds: “Leaders can fight corruption and promote peace all at once. Governments must open up space to include the public in decision making – from activists and business owners, to marginalised communities and young people. In democratic societies, the people can raise their voices to help root out corruption and demand a safer world for us all.”
Indeed, the people came out in full force in 2022, demanding an end to this rotten business… but to no avail it would seem, in hindsight.
Meanwhile, the South Asia Economic Focus Spring 2023 report titled ‘Expanding Opportunities: Toward Inclusive Growth,’ published by the World Bank affirms that Sri Lanka’s economy “has shown initial signs of stabilisation, albeit at a low-level equilibrium with moderating inflation, easing foreign exchange liquidity pressures and some progress in debt restructuring.”
The report adds: “However, the path to recovery remains narrow with limited fiscal and external buffers. Successful debt restructuring and the continued implementation of structural reforms remain essential to restore stability, and put the country back on a sustainable growth and poverty reduction path.”
Overall, the report maintains an optimistic outlook, underscoring that the trajectory of growth hinges on advancements in debt restructuring and the successful execution of growth boosting structural reforms.
In this 30th edition of LMD 100, Expolanka Holdings claims top billing for financial year 2022/23, boasting a consolidated revenue exceeding Rs. 546 billion. This marks the second consecutive year in which Expolanka secures the top spot in Sri Lanka’s version of the Fortune 500. In the context of profitability, Expolanka retains second place with a profit after tax (PAT) of 31 billion rupees.
Hayleys, an eight time top ranked listed company, is second in the pecking order for the second consecutive financial year by virtue of reporting a top line of Rs. 487 billion. And the highly diversified conglomerate secured fifth position in the profitability stakes with a PAT of almost 28 billion rupees.
Meanwhile, LOLC Holdings maintains its No. 3 position with a consolidated revenue of Rs. 333 billion. In terms of post-tax profits however, LOLC dropped from sitting at the top of the podium to eighth place with a bottom line of nearly 22 billion rupees.
In financial year 2022/23, a noteworthy 19 LMD 100 corporations reported earnings exceeding Rs. 100 billion while 10 among the top 100 recorded losses.
In the latest edition of the nation’s pioneering listed company rankings, 77 corporates (compared to 69 in the previous year) reported annual revenues ranging between Rs. 10 billion and 100 billion rupees. As for profitability, 19 entities achieved a PAT exceeding Rs. 10 billion.
The one of a kind rankings debuted 30 years ago in 1993/94 as The LMD 50. Of the initial top 50 entities, 25 no longer occupy a spot in the current iteration.
And in the latest LMD 100 rankings, an equal number of corporates secure a place in the top 50 despite not being contenders when the rankings were launched. This includes the 2022/23 table leader Expolanka Holdings.
Aggregate revenue of the 100 leading listed entities has grown by a healthy 43 percent in the latest rankings whereas their combined bottom line has shrunk by an eye opening 24 percent.
