EU Yan Sang posted a net loss of S$150,000 for the first quarter ended September, from a net profit of S$737,000 a year ago. This, they said on Thursday, was largely due to macro factors such as the decreased spending from parallel traders and mainland Chinese visitors in Hong Kong, as a result of travel restrictions imposed by China, and weakening of the Malaysian ringgit and Australian dollar.
Revenue for the quarter dipped 9 per cent, from S$83.0 million to S$75.2 million.
"The volatile business environments in our key markets like Hong Kong and Malaysia will continue to pose significant challenges for the group. We do not see a quick recovery in the near future. On the flip side, Australia and Singapore show escalated growth, with Australia on track to register double digit same store sales growth. Singapore has also demonstrated positive revenue growth and the wholesale business is expected to pick up momentum," said Richard Eu, group chief executive officer.
"We have started evolving our business in view of the changing consumption and retail landscape. Our TCM and wellness products from various markets are now available at tax free outlets and e-commerce channels, allowing consumers and parallel traders to purchase products previously not available in their countries. We have also taken steps to ensure we have a healthy pipeline of products that answer to the lifestyle and market demands."
The group said it has implemented cost reduction initiatives through rationalisation of weak performing retail outlets, while continuing to focus on improving efficiency at back office operations through the usage of technology. With more emphasis on wholesale and e-commerce channels, the group expects to mitigate the impact from the negative operating environment and turn the business around.