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Eu Yan Sang Q3 profit dented by forex losses, closing of F&B operations in China
Eu Yan Sang International Ltd reported a slump in net profit to S$286,000 for the third quarter ended March 31 from S$5.45 million, as it suffered decline in operating revenue, foreign exchange losses and expenses related to cessation of F&B operations in China.
Revenue during the quarter slipped 6 per cent to S$103.87 million mainly due to a decrease in revenue generated from the Malaysian market as well as the weakening of the Malaysian ringgit.
The group was also dealt a blow from foreign exchange losses of S$1.9 million from the weakening in Hong Kong dollar during the third quarter and "other losses" of S$2.79 million. The latter stemmed from the closing of two remaining F&B restaurants during the third quarter. The closure expenses included loss on disposal of fixed assets, fixed assets written off, retrenchment expenses and professional fees.
"Despite the sluggish regional economy, we are heartened by the green shoots of recovery budding in some of our markets. Moving forward, we remain committed to improving our performance through cost reduction initiatives and rationalisation, while seeking greater levels of efficiency through the use of technology," said group CEO Richard Eu. "On the other hand, weak macroeconomic conditions continue to weigh down our market performance in Hong Kong and Malaysia. Deterioration in these markets may affect our business outlook for our fourth quarter."
The group has proposed an interim dividend of two and a half cent per share. The dividend will be paid on June 16 and the book closure date is May 25.