SINGAPORE - Eu Yan Sang reported on Thursday (Nov 12) a net loss of S$150,000 for its first quarter ended Sept 30, from a net profit of S$737,000 a year ago.
Group revenue for the quarter fell 9 per cent to S$75.2 million.
The company blamed the loss on macro factors such as the decreased spending from parallel traders and mainland Chinese visitors in Hong Kong due to travel restrictions imposed by China. The overall weakening of the Malaysian ringgit and Australian dollar further exacerbated the group's financial performance, it added.
This was partially offset by higher revenue growth in Australia and Singapore, the company noted.
Revenue for the quarter fell 9 per cent to S$75.2 million.
Said Mr Richard Eu, group chief executive officer: "The volatile business environments in our key markets like Hong Kong and Malaysia will continue to pose significant challenges for the group. We do not see a quick recovery in the near future."
"On the flip side, Australia and Singapore show escalated growth, with Australia on track to register double digit same store sales growth. Singapore has also demonstrated positive revenue growth and the wholesale business is expected to pick up momentum."
He added: "We have started evolving our business in view of the changing consumption and retail landscape. Our TCM and wellness products from various markets are now available at tax free outlets and e-commerce channels, allowing consumers and parallel traders to purchase products previously not available in their countries. We have also taken steps to ensure we have a healthy pipeline of products that answer to the lifestyle and market demands."
The company added that in view of the challenging environment ahead, it has also implemented cost reduction initiatives through rationalisation of weak performing retail outlets while continuing to focus on improving efficiency at back office operations through the usage of technology. With more emphasis on wholesale and e-commerce channels, the group expects to mitigate the impact from the negative operating environment and turn the business around.