SINGAPORE (Oct 25): Second Chance Properties posted earnings of $0.2 million for the 4Q16 ended August, plunging 90.2% from $2.1 million in the same period a year ago on lower revenue.
(See also: Second Chance Properties’ 4Q earnings plummet 63.3% to $2.1 million)
Revenue for 4Q16 fell nearly 25% to $12.3 million from $16.3 million previously.
While the diversified business entity registered lower revenue across all its business segments compared to the year before, the biggest contributions to the drop came from declines in revenue from the apparel and securities segments by 30.85% and 18.04% respectively.
The drop in revenue from apparel by $4.84 million was due to the closure of fifteen shops in Malaysia, the introduction of GST, and the unrealised foreign exchange loss because of the depreciating Malaysian Ringgit contributed to the loss in this business.
On the other hand, revenue from securities came in $0.94 million lower as a result of a drop in coupon payments and dividends on the group’s fixed income and equity securities redeemed/sold since FY 2015.
For the full year, the group reported a 32% decline in FY16 earnings to $7 million from $10.3 million in FY15. Revenue of apparel fell 31% to $10.9 million, gold fell 1% to $15.7 million, properties fell 7.4% to $8.3 million while securities fell 18% to $4.3 million.
Second Chance says it expects Singapore’s economic outlook to remain cautious amid macroeconomic volatility. with GDP growth expected to be lower in 2017.
While it expects the gold business to remain profitable, the group says its apparel business remains very challenging, especially in Malaysia, and several more nonperforming outlets are slated for closure.
The group adds that retail occupancy and rentals continue to decline as “retailers remain cautious about expansionary plans amid persisting labour woes and a bleak economic outlook", which will have a negative effect on its rental income.
Shares of Second Chance closed flat at 26 cents.
