Sathosa recorded Rs.22 billion loss by end-2024, says Minister

By The Pulseline News Desk

Lanka Sathosa accumulated losses of Rs.22 billion by the end of 2024, with outstanding supplier payments accounting for a substantial portion of its financial burden, Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe has said.

The Minister has said the Government had moved to address the state-owned retail network’s financial difficulties by settling a Rs.5.3 billion overdraft, which had been adding to its losses through substantial interest payments.

“When we took over in 2024, at the end of 2024, the loss of Lanka Sathosa was Rs.22,000 million,” Samarasinghe has said, explaining the financial challenges inherited by the Government.

He has said Sathosa had been paying Rs.30 million to Rs.40 million a month in interest on its overdraft, amounting to a substantial annual cost that further compounded its financial difficulties. The Government’s decision to clear the Rs.5.3 billion overdraft was intended to ease this pressure and prevent the accumulation of further interest-related costs, according to the Minister.

Samarasinghe has said the retailer’s financial difficulties also included approximately Rs.14 billion owed to suppliers, highlighting the scale of its outstanding obligations.

He has said the Government was working to reduce supplier arrears, cut losses from unprofitable operations and ease the financial burden on the institution as part of a broader effort to rebuild Lanka Sathosa.

The Minister’s remarks come amid questions over the future of the state-owned retail network and whether it should continue operating as a Government institution.

Referring to comments by former Finance Minister Ravi Karunanayake on the possibility of selling or handing over Lanka Sathosa, Samarasinghe has defended the institution’s continued role in the country’s goods distribution system.

He has argued that Sathosa should not be assessed solely on its financial performance as a state-owned enterprise, but also on its contribution to maintaining market stability and supporting consumers. “This is not just a state institution; this is the mechanism we have to use, along with the private sector, to control goods prices,” he has said.

Samarasinghe has maintained that Lanka Sathosa remained an important instrument through which the Government could work alongside private retailers to influence prices and ensure the distribution of essential goods.

The Government’s stated approach is therefore to restore the retailer’s financial position while retaining its role in the wider consumer market.

However, the extent to which the measures will improve Sathosa’s financial performance will depend on its ability to reduce supplier arrears, limit losses from unprofitable operations and sustain its distribution role without accumulating further liabilities.