SINGAPORE (Feb 13): Courts Asia, the electrical, furnishing and consumer electronics retailer, announced earnings of $3.5 million for the third quarter of FY17, down 28.7% from its net profit of $4.9 million a year ago on lower gross profit margin and higher administrative expense.
Revenue for the quarter grew by 0.6% to $186.8 million from $185.6 million a year ago, mainly due to higher revenue contributions from Singapore due to the re-launch of its online platform and the re-opening of Courts Megastore at Tampines in Nov 2017.
This was however offset in part by a decline in revenue from Malaysia, due to lower sales of good and earned service charge income, while Indonesia revenue increased slightly by 1.8% in Rupiah currency terms due to contributions from newly-opened stores.
In line with the higher revenue, cost of sales grew 1.9% to $122 million from $119.7 million a year ago.
Distribution & marketing expenses as well as finance expenses fell by 1.2% and 4.9% to $13.7 million and $5 million, due to lower advertising costs and lower interest expenses in Indonesia, respectively.
Administrative expenses however grew 2.4% to $42.6 million over the quarter due to higher allowance for impairment of trade receivables.
Gross profit for 3Q fell by 1.7% to $1.1 million, mainly as gross profit margin fell to 34.7% from 35.5% in 3Q16 on lower merchandise margin in Singapore.
Terence Donald O’Connor, the group’s executive director and group CEO, highlights Courts Asia’s strong topline performance despite weak retail sentiment over the quarter.
“Moving forward, we will continue to build on our omni-channel strategy, driving an improved online as well as an immersive in-store experience,” says O’Connor.
“In the short term, while we expect the overall retail environment across our key markets to remain slightly muted, we are cautiously optimistic on our longer term outlook, and will continue to focus on our profitability by managing cost and productivity and investing in growth areas,” he adds.
Shares in Courts Asia closed 1 cent higher at 29 cents on Tuesday.
