SINGAPORE: Mainboard-listed Eu Yan Sang International said on Friday (Feb 12) its net profit for the second quarter plummeted 75 per cent, hurt by a weak Malaysian ringgit and lower revenue from the Hong Kong market.
Net profit for the three months to Dec 31 was S$498,000, down from S$1.98 million in the same period a year ago.
Revenue, however, was up 1 per cent at S$85.61 million, compared with S$84.69 million a year ago, mainly due to higher sales from Singapore and Australia.
Revenue from Hong Kong declined 13 per cent in the quarter, due to a decline in spending by mainland Chinese tourists and the “ongoing challenging retail environment”, the company said. This was partially offset by the strong Hong Kong dollar, which helped to reduce the revenue decline to 5 per cent when translated to Singapore dollars.
Revenue from Malaysia rose 14 per cent due to higher sales, but as a result of the weak ringgit, was down 8 per cent when translated into Singapore dollars.
In Australia, revenue rose by 18 per cent due to an increase in the number of outlets and higher sales. However, the appreciation of the Singapore dollar against the Australian currency resulted in only an 8 per cent increment in revenue in Singapore dollars, Eu Yan Sang said.
Revenue from Singapore improved by 13 per cent during the quarter, due to the launch of new products and promotional campaigns.
“Despite the challenging business environments in key markets of Hong Kong and Malaysia, we are glad that Hong Kong’s rate of decline is showing signs of moderation and an improvement in Malaysia. Singapore and Australia have continued to show positive growth and added resilience to our Group’s results,” Group CEO Richard Eu said.
The company plans to expand its retail network in Australia and Malaysia, and will also launch several joint ventures in China to boost its growth in the Chinese market, he added.
Looking forward, Eu Yan Sang said it remains cautious on its business outlook. The company plans to reduce costs through the “rationalisation” of weak performing retail outlets, while continuing to improve its operational efficiency through technology, it said.