F J Benjamin Q2 profit higher at S$1.24m despite revenue fall
Singapore
FASHION and lifestyle group FJ Benjamin Holdings posted a net profit of S$1.24 million for the second quarter ended Dec 31, 2014, up from S$586,000 for the corresponding quarter a year earlier.
The bottom line was boosted in part by higher share of results of associates/joint ventures, which came in at S$853,000 versus S$151,000 previously. Foreign exchange losses also narrowed from S$1.02 million to S$185,000.
Revenue, on the other hand, slipped nearly 17 per cent to S$87.09 million, owing to a challenging operating environment.
For the quarter under review, earnings per share grew to 0.22 Singapore cent, up from 0.10 cent.
In 2QFY15, group turnover from its fashion business fell 10 per cent to S$69.2 million while the timepiece business reported a 36 per cent drop in turnover to S$17.6 million.
FJ Benjamin highlighted that weaker tourist arrivals have impacted sales in Singapore and Malaysia, especially as spending from mainland China and Indonesia has been soft. In Malaysia, severe floods in December also hurt consumer spending. Sales in South-east Asia declined 10 per cent to S$80.9 million in 2QFY15.
"The business in Indonesia continued to do well and registered increased sales of 5 per cent despite the challenging trading conditions," the retailer added. Given declining performance in North Asia, FJ Benjamin is downsizing its operations in Hong Kong and Taiwan, which is slated for completion by 3QFY15.
During the quarter, gross profit dropped 12 per cent to S$34.62 million, although gross margins rose from 38 per cent to 40 per cent on the back of better inventory management and strategic tactical promotions to boost sales.
"The increased volatility in the global economy, in particular softer growth in China, will continue to weigh down on Asia's economic outlook and affect consumer sentiment," FJ Benjamin said. "In view of this, the group continues to focus on improving productivity through store rationalisation, managing inventory levels and capitalising on cost efficiencies."
FJ Benjamin shares were last traded at S$0.15 on Wednesday.
