Challenger's H1 earnings rise 17%, lifted by government grants

CONSUMER electronics retailer Challenger Technologies posted a 17 per cent rise in net profit to S$9.65 million for the six months ended June, boosted by S$2.53 million in sundry income, mainly from government grants.

The mainboard-listed firm's top line fell 27 per cent for the period to S$118.5 million, with contributions from the IT products and services business segment falling 27 per cent to $116.9 million. This was due to the lack of trade shows and weaker retail sales amid the Covid-19 pandemic. The fall was cushioned by stronger online sales.

Meanwhile, revenue from its telephonic call centre and data management services declined more than half to S$1.3 million in H1, as more data management and marketing projects were put on hold amid the pandemic

Challenger's revenue from its electronic signage services business segment remained flat at S$200,000, mainly supported by a major project completed in Q1 FY2020.

However, Challenger's bottom line improved with the sundry income from the Singapore government's Jobs Support Scheme and Wage Credit Scheme. Its premises expenses also decreased by S$2.7 million due to rental waiver and rebates, while employee benefits expenses decreased by S$1.7 million.

Moving forward, Challenger is cautiously optimistic. "The group will continue to exercise caution in managing overall business given various uncertainties at the macro level. We will continue to focus on driving greater e-commerce productivity to mitigate the downside impact coming from the weak retail operations amid pandemic," it said.

Shares of Challenger closed S$0.465 on Tuesday, up 1.09 per cent, before the results release.