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Best World International posts 77.2% jump in Q4 profit to S$21.8 million
BEST World International's fourth-quarter earnings jumped on higher turnover and a tax credit, it said on Monday.
The mainboard-listed beauty and wellness product company reported a net profit of S$21.8 million for the three months to Dec 31, 2017 - skyrocketing by 77.2 per cent from the previous year.
The rise of the Chinese dragon gave a fillip to the top line, as revenue grew by 19.8 per cent to S$74.1 million.
Best World also recorded an income tax credit of S$1.5 million for the quarter, compared with an income tax expense of S$6.2 million previously.
Close to half of the quarter's revenue came from the mainland Chinese market - or double China's contribution for the previous year.
The growth was thanks to the company's China export agent placing three to six months of orders in the quarter, Best World said, attributing the move to a growing demand for the group's proprietary DR's Secret skincare line and the long Chinese New Year holiday.
Best World is working to convert its export segment to direct selling, starting in the first half of the year. It said that this change "will be carried out in phases and will have minimal impact on the group's profitability".
It said that it is applying to boost its direct selling coverage beyond Hangzhou and aims to garner approval for key cities of at least seven provinces by the end of FY2018.
Meanwhile, turnover from Taiwan - previously Best World's biggest market - fell by 22 per cent for the three months, with the company citing "changes in strategies implemented since the beginning of FY2017, coupled with stiff market competition as well as frequent online discounting".
Both top and bottom line are expected to improve in FY2018, the company said, "as management expects growth momentum to continue from the group's business in China".
Best World said in a statement: "In line with management's expectation, China market has leapfrogged to become the group's largest revenue contributor and will continue to be the group's key growth driver."
Earnings per share rose to 3.96 Singapore cents, from 2.24 Singapore cents the year before.
The board has proposed a final dividend of 2.6 Singapore cents a share, against three Singapore cents a share for the same period the previous year.
For the full year, net profit was higher by 61 per cent, at S$55.7 million, while revenue increased by 10 per cent to S$220.9 million.
Best World closed up by S$0.01, or 0.74 per cent, to S$1.37, before the announcement.