SINGAPORE - Earnings at electronics retailer Courts Asia Limited grew 0.3 per cent in the third quarter compared with the same period a year ago amid a weak retail market.
Net profit for the three months ended Dec 31 was $4 million. Revenue grew 6.1 per cent to $204.7 million.
"In Singapore, the macro environment is very much against the consumer market at the moment," executive director Terry O'Connor told a briefing by conference call.
"The economy is going through some restructuring in terms of the residential property market, the total debt servicing ratio, the labour market and restrictions", he noted.
Revenue from Singapore, which made up about 69.8 per cent of Courts Asia's revenue for the three months, grew by 7.9 per cent due to higher bulk sales of IT products like iPads and mobile phones.
Mr O'Connor, who is also the chief executive, noted that there would be a rush for some new innovations in this area regardless of what is happening in the economy.
Malaysia sales, which contributed to 28.7 per cent of the group's revenue, rose 20.0 per cent in local currency terms due also to bulk sales for IT products.
Indonesia sales, which contributed to 1.7 per cent of the group's sales, registered a 6.1 per cent gain in local currency terms due to new store openings.
Gross profit margin fell 2.4 percentage points to 29.7 per cent, due to a shift in sales mix to electrical products and higher bulk sales which carry lower margins.
Mr O'Connor said he does not expect much sales growth in Singapore in the next year.
However, he noted that "in terms of bottom line management, Singapore has an opportunity to improve just because of effective cost management".
If the company did not get sufficient rent reductions on two underperforming local stores it might give them up, he noted.
However, he remained positive that the "sluggish period" would pass as "inevitably some of those macro factors will change."
He also noted that the government "has a habit of responding proactively when things need to be stimulated".
Demand for household appliances and furniture would be supported by an increase in supply of HDB flats in 2016, Mr O'Connor added in a statement.
Earnings for the three months was 0.77 cents, up from 0.73 cents last year.
Net asset value at December 31 was 53.6 cents, down from 55.1 cents at March 31.