Courts Asia in the red for Q4; full-year profit dives 66%

MAINBOARD-LISTED Courts Asia announced on Wednesday it made a net loss of S$3.02 million for its fourth quarter ended March 31, 2018 on the back of poor business performance in Malaysia, reversing from a profit of S$3.99 million a year ago.

Revenue for the quarter dipped 9.5 per cent to S$163.3 million, while loss per share stood at 0.59 Singapore cent, compared with earnings per share of 0.78 Singapore cent a year ago.

No dividend was declared for Q4.

For the full year, Courts Asia remained in the black, but its net profit dived 66 per cent to S$8.1 million from S$23.7 million a year ago, again due to weak performance in its Malaysian business.

Revenue for FY17/18 dipped 3.7 per cent to S$713.1 million, mainly due to lower sales of goods and earned service charge income in Malaysia.

Earnings per share for the full year came in at 1.56 Singapore cents, down from 4.59 Singapore cents previously.

Similarly, no dividend was declared for FY17/18.

Courts Asia's executive director and group CEO Terence O'Connor explained that despite a "strong performance" from Singapore, the business faced headwinds in Malaysia arising from the introduction of the Consumer Protection (Credit Sale) Regulations 2017.

With interest rates capped at 15 per cent per annum along with new compliance processes, revenue fell, he said.

"In addition, faced with a more challenging collections environment in Malaysia, the impairment allowance for trade receivables increased by S$9.7 million over the previous year. The fall in revenue, coupled with an increased credit cost and a more prudent credit sanctioning approach in Malaysia, affected our group's profitability," he added.

Mr O'Connor said that the business remains cautiously optimistic about Malaysia's outlook and will "work on the business transformation to ensure long-term sustainability".