SINGAPORE (Nov 9): Courts Asia has reported a net profit of $1.5 million for 2Q FY17/18, down 74.7% from its net profit of $5.98 million a year ago on lower profit margins in Singapore.
Revenue for the quarter fell 1.4% to $176.5 million compared to a year ago from lower revenue contributions from Malaysia, which decreased 19.7% in Singapore currency terms due to the lower sales of goods and earned service charge income.
The lower contribution from Malaysia was partially offset by higher revenue from Singapore and Indonesia, which grew due to higher sales of goods and contributions from newly-opened stores, respectively.
Gross profit margin, however, decreased to 34.2% in Q2 FY17/18 to from 35.9% in Q2 FY16/17.
This was mainly due to lower merchandise margin across all product categories in Singapore due to ongoing renovation sale promotions in its Singapore flagship store, COURTS Megastore; a drop in credit sales in Singapore and Malaysia; as well as an increase in impairment costs.
Overall, the group remains optimistic on the longer-term outlook while investing in the growth engines of its business, as it seeks out opportunities to deliver greater shareholder value.
“The retail landscape has been challenging and uncertain across our operating markets. Whilst topline performance held steady, our bottomline took a short-term impact from lower margins this quarter mainly due to ongoing renovation sale promotions at our Megastore and a dip in credit sales,” says executive director and group CEO, Terence Donald O’Connor.
“We have undertaken a cost-efficiency exercise to reduce the operating costs which included right-sizing the workforce to the business. Moving forward, it is imperative that we continue to keep a sharp focus on increasing productivity and controlling costs,” he adds.
Shares in Courts Asia closed 1 cent lower at 38 cents on Thursday.
