SINGAPORE - Singapore-listed social media and e-commerce company YuuZoo Corporation is back in the black, posting second-quarter net profit of S$8.4 million from a net loss of S$1.4 million a year earlier.
This was driven by franchise sales in Hungary, Slovakia and Czech Republic, the company said.
Revenue for the three months ended June 30 was S$17.7 million, down 17 per cent from S$21.3 million in the corresponding period last year.
The company said the decrease was mainly due to a change in adopting "a more prudent means of revenue recognition as well as lower payment revenue".
Its results release came alongside an announcement about a change in accounting policy.
The company said it has decided, after discussions with various parties including the Singapore Exchange and its auditors, to discontinue the accounting policy of booking as revenue the value of the shares it receives as payment for the franchises it sells.
Instead, it will record as revenue a one-time franchise fee based not on valuation but on the company's cost of developing the franchise packages it sells.
YuuZoo has recently been embroiled in controversy over its disclosure and accounting practices.
There have also been a string of executive departures - at least 15 directors and key officers including chief financial officers and two audit committee chairmen - from the company since its listing in September 2014.
Chief operating officer Mohandas said in a statement on Tuesday (Aug 15): "YuuZoo's significantly conservative and prudent accounting policy was decided in the best interest of YuuZoo's shareholders. Under this new policy, YuuZoo books significantly lower revenue and profit for each franchise package sold.
"YuuZoo's...stellar growth and performance despite lower revenue and profit recognition under the new accounting policy demonstrates the potential of YuuZoo and how we are positioned to capitalise on the opportunities in the market."
Earnings per share for the quarter came in at 1.06 cents, from a loss per share of 0.21 cent a year earlier. Net asset value per share was 13.86 cents as at Jun 30, from 12.31 cents on Dec 31.