Courts Asia Q4 profit down as Singapore, Malaysia sales weaken

Courts Asia reported a fourth quarter net profit of $6.6 million, down 16.4 per cent year-on-year, as sales were flat in core markets amid difficult operating environment for retailers. -- PHOTO: KNIGHT FRANK
Courts Asia reported a fourth quarter net profit of $6.6 million, down 16.4 per cent year-on-year, as sales were flat in core markets amid difficult operating environment for retailers. -- PHOTO: KNIGHT FRANK

SINGAPORE - Courts Asia reported a fourth quarter net profit of $6.6 million, down 16.4 per cent year-on-year, as sales were flat in core markets amid difficult operating environment for retailers.

Revenue for the three months to March 31 was down 7 per cent year-on-year to $192.5 million, also due partly to its Indonesian expansion that has lagged behind.

"Since May 2015, three stores have been operational and we expect the fourth store to be opened by the calendar year-end, which should ensure economies of scale will kick in for the Indonesia market," the furniture and appliance retailers said in its results announcement on May 27.

For the full year, net profit was down 38.7 per cent year-on-year to $17.4 million, following an 8.6 per cent drop in revenue from 2014 to $758.5 million.

Singapore's sales, which contributed to 66 per cent on the company's total, dropped 11 per cent over the year due to a weak retail environment. In Malaysia, which accounted another 33 per cent of revenue, sales also dropped 5.8 per cent in Singapore dollar terms amid consumer anticipation for the Goods and Services Tax implemented in last month.

Earnings per share were down 15.4 per cent to 1.21 cents for the fourth quarter and down 37.8 per cent to 3.16 cents for the full year, while net asset value went up 2.4 per cent to 55.1 cents at the end of the financial year.

Chief executive Terence O'Connor noted that the weak fourth quarter was in fact the strongest of the year, and better times are ahead.

"As we approach festive seasons like Hari Raya, we expect sales will pick up... With the two new stores in Mega Bekasi Hypermall and Bogor added into our Indonesia store network, we are also on track to achieve economies of scale and operational efficiency in the year's second half."