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During first nine months of the financial year 2002/2003, Sathosa Motors Ltd., (SML) achieved a pre tax profit of Rs. 8.0 Million and January 2003 achieved a pre tax profit of Rs. 4.0 Million making a total of Rs. 12.0 Million for the 10 months.

The Management expects the total pre tax profit for the 12 months of 2002/2003 to be Rs. 20.0 Million, thus bringing the organisation to a forward march.

This could be achieved, if the peace process continues and an economic condition conducive for business remains in the future, a press release from the company said.

During the financial year 2001/2002, the company faced a setback and ended up with an operational loss of Rs. 7.6 Million before tax. This was mainly brought about as a result of the company deciding to make specific write offs amounting Rs. 8.0 Million on non moving stocks accumulated over the years and increasing the debtors provision by Rs. 0.2 Million.

Hence, the loss of Rs. 7.6 Million should have been read in that background, and on the other hand, if we did not write off these amounts we would have had an operational net profit of Rs. 0.6 Million.

The drop in sales was mainly due to the adverse situation which arose due to the terrorist attack at the country's main airport at Katunayake, the terrorist attack at the US World Trade Centre affecting the global economy and above all, the uncertain political and economic environment which lead to the downturn of economy to a below zero level GDP.

The SML which had a favourable market share with the government sector suffered severely when the newly appointed government went on a cost cutting exercise and adopted a policy of hiring of vehicles instead of purchasing them.

The turnover during the nine months ended 31.12.02 dropped to Rs. 246 Million and the number of vehicles sold were reduced.

However, as compared to the previous financial year during the nine months ending 31.12.02, showed profitability despite the fact that economic conditions were not conducive. By prudent management, SML was able to bring about a change and convert the company to a profitable venture.

The company took stringent measures to curtail unwanted expenditure, control over the finances and inventory and close monitoring of debt recoveries, while every effort was made to give a better service to the customers.

"We felt that customer care and after sales services were very important and we instilled this fact into the employees through regular training sessions."

Within regulatory systems, we brought about a reduction in staff as some redundant jobs were not replaced. All these factors have contributed to a rejuvenated business environment, the release said.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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