Parkson Retail Asia's Q2 profit dives nearly 25%

DEPARTMENT store operator Parkson Retail Asia reported a 24.6 per cent year-on-year slide in net profit to S$10.23 million for the second quarter ended Dec 31, 2014.

This was due to losses incurred by new stores, the de-leveraging impact from the negative same store sales growth (SSSG) of the group's Malaysia and Vietnam operations, and the accrual of closure costs for a store in Vietnam.

Revenue was just about flat at S$117.52 million while earnings per share worked out to 1.51 Singapore cents, down from two cents in the corresponding quarter a year earlier. Meanwhile, expenses were up 6.6 per cent to S$109.5 million.

For the six months ended Dec 31, net profit fell 28.2 per cent to S$17.09 million, and revenue was marginally higher, up 0.6 per cent to S$227.51 million.

Group chief executive Toh Peng Koon said: "With the closure of our Landmark-Keangnam store in Vietnam, we've managed to remove a major drag on our operating performance there. While we expect Malaysia's consumer sentiment to remain muted in the near term, consumer buying prior to the introduction of the Goods and Services Tax on 1st April 2015 may provide us with some buffer."

He added: "We feel confident that the strategies we have initiated to improve our fundamentals will reap the desired results going forward. With our healthy balance sheet and strong cash generation from our operations, we are well-positioned to continue to identify and make prudent investments necessary to growing our business."