Duty Free International posts net loss of RM9.1m for Q4

MALAYSIAN multi-channel duty-free and duty-paid retail group Duty Free International posted a net loss of RM9.1 million (S$3 million) for its fourth quarter ended Feb 29, 2020, reversing its net profit of RM10 million previously. But the group said in its statement that it has "ample liquidity to weather through Covid-19 challenges". 

Revenue of RM169.7 million was recorded for the quarter, up 1.3 per cent from RM167.5 million, mainly contributed by Brand Connect Group as well as by a slight increase in revenue from the trading of duty-free goods and non-dutiable merchandise.  

Loss per share for the quarter amounted to 0.76 sen, versus earnings per share of 0.82 sen previously.

For the full year, net profit stood at RM10.9 million, down 76.6 per cent from RM46.5 million a year ago. Revenue was RM617.2 million, up 10.9 per cent from RM556.3 million previously. 

The group's total equity stood at RM557.4 million as at Feb 29, 2020 on the back of positive operating cash flow and net cash generated from investment activities. During FY2020, the group generated positive operating cash flow of RM40.3 million. Net cash generated from investing activities was RM38.3 million, mainly due to proceeds from the investment in the medium-term note. 

Net cash used in financing activities for FY2020 of RM54.2 million was primarily attributable to dividends paid to shareholders. A capital reduction and cash distribution amounting to approximately RM128.9 million was distributed to the shareholders on May, 13 2020. After the distribution, the cash and cash equivalents stood at RM196.3 million, enabling the group to "weather through the challenging operating environment". 

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The group said that its operations were adversely impacted by Malaysia's movement control order, which was implemented to contain the spread of the novel coronavirus. Even with the gradual easing of measures, certain restrictions such as closure of international borders and overseas travel restrictions are still in place. Likewise, its operations in Singapore have also been hurt by virus safety measures. 

To mitigate the adverse financial impact in the next 12 months, the group embarked on a cost-cutting drive by reducing the use of casual labour, clearing leave, deferring discretionary expenses and non-critical capital expenditures, lowering human-resource costs and closing its non-profitable outlets before the end of the second quarter of FY2021.

The group said in its statement: "The outlook for the coming financial year is expected to be very challenging and highly uncertain due to the global economic crisis, travel restrictions, consumers' cautious spending and, more importantly, the unpredictable duration of the global Covid-19 pandemic with no clear indication when the duty free industry will be able to recover from it." 

Shares of Duty Free International closed on Wednesday at 9.8 Singapore cents, down 0.1 cent or 1 per cent.