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Courts records higher Q3 profit despite revenue drop
ELECTRICAL, IT and furniture retailer Courts Asia said on Tuesday evening that net profit rose 24.4 per cent to S$5 million for its third quarter ended Dec 31, 2016, from S$4 million a year ago.
Higher profit was achieved despite an 8.6 per cent drop in revenue to S$187.2 million, from S$204.7 million a year ago.
Revenue had fallen mainly due to lower corporate sales of digital products. Singapore revenue, which makes up two-thirds, fell 12.3 per cent.
But the group recorded a higher gross profit due to a higher earned service charge income and a higher merchandise margin. It also enjoyed lower interest expenses in Singapore and lower income tax expenses due to tax credits from Indonesia's losses and lower taxable profits from Malaysia.
Terence O'Connor, Courts Asia's chief executive officer, said the group's profitability in spite of a lacklustre retail environment underscored the sustainability of its cost savings initiatives and productivity measures.
But the company anticipates a challenging environment in the near term due to macroeconomic pressures and a soft retail environment.
He said the company will enhance its online capabilities for the coming year, while increasing its store base in Malaysia and Indonesia.
"Overall, the group remains optimistic on the longer term outlook, supported by improving consumer sentiment in Singapore, Malaysia and Indonesia," the company said.
Courts Asia closed unchanged at S$0.435 before results were out.