Osim International reports sharp drop in Q1 profit

Lifestyle products firm Osim International reported a sharp profit drop in its first quarter results, with a 53 per cent fall from last year in profit after tax to $13.5 million. -- PHOTO: OSIM
Lifestyle products firm Osim International reported a sharp profit drop in its first quarter results, with a 53 per cent fall from last year in profit after tax to $13.5 million. -- PHOTO: OSIM

SINGAPORE - Lifestyle products firm Osim International reported a sharp profit drop in its first quarter results released today.

Sales fell by 13 per cent, from $173 million in the first quarter of 2014 to $150 million in the same period this year.

Profit after tax plunged sharply to $13.5 million, a 53 per cent fall from last year.

However, interim dividend remained unchanged at 1 cent per share compared with the first quarter of 2014.

The firm attributes the drop in sales revenue to a "challenging quarter" and soft retail sales.

Peter Lee, chief financial officer at Osim International, said: "People are generally being a bit mindful in terms of spending. There is also a second contributing factor, which is the fact that we did not have any major product launches during the (first) quarter."

The steeper decrease in profits compared to sales revenue is " impacted by startup and operational cost pressures at TWG Tea and increases in wages and rental."

TWG Tea, a luxury tea brand, is a subsidiary of Osim International.

"Despite these challenges, our dominant brand has enabled us to maintain a stable gross margin and highly cash generative business. We are continuing to invest for growth supported by a strong balance sheet," the company said.