MAINBOARD-LISTED Challenger Technologies reported on Friday (Feb 17) a 40 per cent decline in net profit for the second half, despite higher revenue.

The company said in a bourse filing that net profit for the six months ended Dec 31, 2022 fell to S$5.1 million, down from S$8.4 milliion in the year-ago period. On a per share basis, earnings fell to S$0.0126 in H2 FY22, down from S$0.0238 in H2 FY21.

A final cash dividend of S$0.0125 per share was proposed, down from the final dividend of S$0.028 per share in the year-ago period. The dividend is payable May 18, 2023.

For H2 2022, Challenger’s revenue rose 9 per cent to S$160.4 million, with information technology products and services revenue contributing to the increase.

Revenue for the full year was also up 3 per cent to S$291.4 million. Challenger noted that both retail and corporate sales rose during the year, and this increase came in line with the reopening of borders leading to tourism spending, as well as better spending sentiment among local consumers and small businesses. 

However, net profit for the full year was down 44 per cent to S$9.9 million.

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“The lower profit achieved was largely due to the fair value loss on investment, reduced Covid-related government wage supports and higher operating expenses incurred.,” Challenger said.

In terms of outlook, Challenger said both local consumer and tourist spending in Singapore are expected to continue rising as the world emerges from Covid-19.

However, it added “the group is cautiously optimistic” as inflationary pressure and the goods and services tax hike could potentially dampen consumer retail expenditure.

“The group will continue to focus on its core retail business, as well as ramping up e-commerce engagement by collaborating with e-commerce platforms, and enhancing its overall product range,” Challenger said.

“We will also continue to look for business opportunities, drive operational efficiencies and further strengthen our balance sheet.”

As at Dec 31, 2022, net asset value per share stood at S$0.40, unchanged from the previous year.

Challenger shares closed unchanged at S$0.52 on Friday, before the earnings announcement.