Dec 18, 2007 (LBO) – Fitch Ratings Lanka has lowered the outlook on the ‘A+(lka)’ long-term ratings on Singer Sri Lanka’s senior unsecured notes to negative, the rating agency said Tuesday. Singer is the Sri Lanka’s largest retailer of consumer electronics and household appliances, in terms of revenue and points of presence. It is 84 percent-owned by Singer Asia, which in turn, is 56.8 percent-owned by Singer N.V. “The Outlook revision to Negative primarily reflects the weakened net income levels at Singer (Sri Lanka) amidst increasing debt levels, in large part, due to higher interest payments and lower sales growth,” the rating agency said.
“A further weakening of Singer’s credit metrics will lead to a downgrade of the ratings.”
It noted that sales growth was lower in Singer, the island’s top retailer of consumer durables, and that profitability of consumer financing operations was eroding owing to higher cost of funds.
More than half of Singer (Sri Lanka) sales was financed through in-house loans and high inflation was affecting its main consumers in the low and low-middle income earners.
Fitch Ratings said in a statement it expects interest rates to remain high for t