Eu Yan Sang's Q3 net profit plunges 95%

Traditional Chinese medicine group Eu Yan Sang's profits were battered by currency fluctuations even as the company grappled with a weaker business environment. The company's profits dived to just $290,000 in the three months to March 31, down 95 per cent from the same period last year.

Revenues were also down by 6 per cent to $103.9 million in the same period.

But the weaker performance did not stop the firm from declaring a dividend of 2.5 cents.

Earnings per share fell to just 0.06 cents, down from 1.21 cents previously. Net asset value stood at 35.3 cents as at March 31.

The company, which requested a trading halt last Tuesday, did not address rumours that it could be looking to delist from the Singapore Exchange.

A company spokesman declined comment when asked about the rumours.

  • AT A GLANCE

  • Q3 NET PROFIT: $290,000 (-95%)

    Q3 REVENUE: $103.9m (-6%)

    DIVIDEND: 2.5 cents per share (none previously)

Eu Yan Sang chief executive Richard Eu said that he remained optimistic, noting that the company is seeing "green shoots" in some of their markets.

The firm blamed weak currencies in Hong Kong, Malaysia and Australia as key reasons for the lower profit and revenue levels.

But it has met with some success with its cost-reduction drive, one which has resulted in lower operating expenses.

Mr Eu also warned that weak macroeconomic conditions are weighing down market performance in both Hong Kong and Malaysia. "Deterioration in these markets may affect our business outlook for our fourth quarter," he added.

Net profit for the nine months ended March 31 also fell 92 per cent to $634,000, compared with the same period a year ago.

The firm also said that it will take a cautious approach and is looking to further reduce costs.This includes reviewing its non- profitable business lines while looking to improve efficiency.

"The group will also continue to review its cash flow and funding requirements to ensure its balance sheet remains sufficiently strong to support future growth," said the firm. The counter was trading at 64.5 cents when the halt was requested.

A version of this article appeared in the print edition of The Straits Times on May 16, 2016, with the headline 'Eu Yan Sang's Q3 net profit plunges 95%'. Print Edition | Subscribe