Isetan Singapore flags loss for first half of 2020

Isetan has taken measures to lower its operating expenses.
Isetan has taken measures to lower its operating expenses.ST PHOTO: MARCELLIN LOPEZ

SINGAPORE (THE BUSINESS TIMES) - Isetan (Singapore) expects a loss for the first half of 2020, because of the cyclical nature of its retail business and the disruptions from the novel coronavirus pandemic, the company said in a regulatory filing on May 16.

The retailer said the post-Chinese New Year decrease in consumer spending and the onslaught of the pandemic have led to a decrease in the revenue for the first quarter of 2020. All its four stores (except the supermarket at Isetan Scotts) will remain closed until June 1 under the government's circuit breaker measures.

To support the tenants at Isetan Wisma Atria, Isetan has granted rental waivers, and this has in turn adversely impacted its rental revenue.

Also, the completion of Isetan Scotts renovation has been delayed as a result of the work stoppage due to the circuit breaker measures, exacerbating the disruptions to the retailer's operations and will continue to weigh on the retailer in the second half of the year.

Even after the measures are lifted, business could take some time to return to normal as safe distancing might remain in place. Also, rental revenue of Isetan Wisma Atria could still be affected in the coming months, given that the pandemic is evolving.

The company has taken measures to lower its operating expenses, but it said there is a limit to this. Also, it has not laid off any of its employees in heeding the government's call not to retrench.

Its cash and cash equivalents amounted to S$25.3 million while its other investments under current assets stood at about S$22 million as at March 31. It does not expect any difficulties meeting its near-term obligations at present. But it will be monitoring its liquidity closely during this time as there is no clarity on when the pandemic would be over and its impact on the retailer.

The counter closed six cents lower at $2.92 on Friday, a day before the profit guidance was issued.