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Courts Asia issues profit warning for Q4; shares dip 5.56%
ELECTRICAL, IT and furniture retailer Courts Asia said on Wednesday that it expects earnings for the fourth quarter ended March 31 to be "significantly reduced", with the possibility of reporting a net loss position for the quarter.
However, the group is expected to remain profitable for the full year ended March 31, Courts said.
The group's Malaysia business was hit by a decline in revenue and profit after the introduction of the Consumer Protection (Credit Sale) Regulations 2017 which led to interest rates being capped at 15 per cent per annum in Malaysia.
The new rules came into operation on Jan 1.
At the same time, Courts also took "a more prudent approach" towards sanctioning credit sales, it said. Amid a challenging collections environment, profitability was further impacted.
Nevertheless, the group's cash position continues to be healthy with strong net cash generated from its operating activities, Courts said.
Courts said it will announce full year results on or before May 30.
The profit guidance was published after market close. Courts shares fell 1.5 Singapore cents or 5.56 per cent to S$0.255 on Wednesday.