Courts Asia in the red for Q4, dragged down by Malaysian business

Mainboard-listed Courts Asia said yesterday that it made a net loss of $3.02 million for its fourth quarter ended March 31 on the back of poor business performance in Malaysia, reversing from a profit of $3.99 million a year ago.

Revenue for the quarter dipped 9.5 per cent to $163.3 million, while loss per share stood at 0.59 cent, compared with earnings per share of 0.78 cent a year ago.

There was no dividend declared for the fourth quarter.

For the full year, Courts Asia remained in the black, but its net profit dived 66 per cent to $8.1 million from $23.7 million a year ago, again due to weak performance in its Malaysian business.

Revenue fell 3.7 per cent to $713.1 million, mainly due to lower sales of goods and earned service charge income in Malaysia. Earnings per share for the full year is 1.56 cents, down from 4.59 cents previously.

Similarly, no dividend was declared for the 2017 financial year.

  • AT A GLANCE

    Revenue: $163.3 million (-9.5%)

    Net Loss: $3 million (comparison not meaningful)

Courts Asia's executive director and group chief executive officer Terence O'Connor explained that despite a "strong performance" from Singapore, the business faced headwinds in Malaysia, arising from the introduction of the Consumer Protection (Credit Sale) Regulations 2017 coming into force on Jan 1 this year.

With interest rates capped at 15 per cent per annum along with new compliance processes, the revenue fell, he said.

"In addition, faced with a more challenging collections environment in Malaysia, the impairment allowance for trade receivables increased by $9.7 million over the previous year. The fall in revenue, coupled with an increased credit cost and a more prudent credit sanctioning approach in Malaysia, affected our group's profitability," he added.

Mr O'Connor said the business remains cautiously optimistic on Malaysia's outlook and will "work on the business transformation to ensure long-term sustainability".

A version of this article appeared in the print edition of The Straits Times on May 31, 2018, with the headline 'Courts Asia in the red for Q4, dragged down by Malaysian business'. Print Edition | Subscribe