SINGAPORE (Aug 7): Best World International announced earnings of $21.7 million for the 1H17 ended June, surging 62.7% from $13.3 million in earnings reported in 1H16 on higher revenue and lower distribution costs.
This brings the direct-selling company’s earnings per share (EPS) for 1H17 to 3.94 cents from 2.42 cents the previous year.
For the half year, revenue rose 15.2% to $100 million in 1H17 from $86.8 million in 1H16 as a result of strong export sales, supported by increased demand for the Best World’s offerings in China.
Sales from China more than doubled to $48 million over 1H17 from $22.4 million in the previous year, driven mainly by growing market demand for the group’s skin care range, DR’s Secret.
Revenue from the group’s key market Taiwan, however, fell 24.4% y-o-y to $41.8 million as a result of the high base effect in 1H16.
In Singapore, revenue grew 16.9% to $3.6 million from $3 million a year ago, thanks to more marketing activities.
Due to the decline in revenue from its Taiwan market, the group’s business of direct selling fell 19% y-o-y to $51.8 million.
In tandem with the decline in its direct selling revenue, Best World also recorded 20.6% lower distribution costs to $24.7 million over 1H17, contributing to the improvement of the group’s net profit margin to 21.7% for the half year.
Segment-wise, export revenue continued its growth momentum to register a 121.7% y-o-y increase to $46.1 million from $20.8 million a year ago, underpinned by higher demand for the group’s DR’s Secret skin care range in China – while revenue from the manufacturing/wholesale segment increased 5.7% to $2.1 million due to the expansion of its internal sales team as well as marketing activities.
Looking ahead, the group’s management believes demand its DR’s Secret range of products in China to continue growing for the remaining months of FY17.
It remains cautiously optimistic of Best World’s performance for the rest of the financial year, and says the group will continue to build on the reaction to market measures implemented this year in Taiwan for its next phase of growth.
Following its strategic review of Best World’s financial prospects in the coming financial years, the group has announced a revision of its dividend policy for FY17-19 to distribute annual dividends of no less than 40% of its consolidated profit net of tax, compared to 30% previously.
An interim dividend of 1.5 cents per share – representing a payout of roughly 38% of the group’s 1H17 net profit – has been recommended for the half year.
“Against macroeconomic headwinds, we have continued to deliver strong growth momentum and are extremely heartened to see our endeavours in the China market paying off,” says Best World co-chairman and president, Doreen Tan.
“We remain cautiously optimistic of our performance for FY2017 as we head into the seasonally-stronger second half,” she adds.
Shares in Best World closed 1 cent lower at $1.59 on Monday.
