SINGAPORE (Aug 4): Challenger Technologies, the IT products and services provider, announced earnings of $3.84 million for 2Q17 ended June, 2% higher than $3.76 million it posted in the same period a year ago.
This comes in spite of a 14% decline in revenue to $78.7 million compared to $91.2 million in 2Q16, which was due primarily to lower contribution from its IT products and services segment on weaker performance from retail operations, as well as lower revenue contribution from the tradeshow division.
The decrease in revenue was primarily due to lower contributions from IT products and services which decreased 13.8% to $77.2 million in 2Q17 from $89.6 million in 2Q16 mainly due to weaker performance from retail operations and lower revenue contribution from tradeshow division, partially offset by revenue contribution from corporate sales and online sales.
Revenue from the electronic signage services business segment remained stable at $0.5 million in 2Q17.
Revenue from the telephonic call centre and data management services slightly down by 9.1% or $0.1 million to $1.0 million in 2Q17 compared to 2Q16 due to lower revenue derived from extended warranty.
Nonetheless, the group registered a slightly higher profit after tax of $3.9 million over the quarter even as overall gross profit declined, attributable to a combination of lower employee benefits expenses; a decrease in depreciation expenses, lower operating expenses and income tax provision, as well as a decrease in rental expenses.
For the half year, the group’s earnings fell 6% to $7 million from $7.5 million a year ago.
In view of continued cost pressures on manpower and rental, coupled with a slowdown in the retail environment, Challenger says it will remain focused on driving greater store productivity.
It also intends to explore business opportunities with strategic partners to grow its business in architectural and commercial lighting projects.
The group has closed down seven poorly-performing stores in the past few months, and presently has a total retail network of 38 stores in Singapore.
Challenger also recently opened its latest 14,000 sq ft flagship store at Bugis Junction.
“We have seen two full months of operations at our new flagship store and look to continuously increase sales there as more customers become familiar with its presence at the basement of Bugis Junction,” says Challenger chief executive Loo Leong Thye
Shares of Challenger closed 0.5 cent lower at 44.5 cents on Friday.
