The Hour Glass' profit rises, Cortina's declines

Singapore

LUXURY watch retailers The Hour Glass and Cortina Holdings both released their results on Wednesday for the third quarter of financial year 2015, with the former reporting higher profits and the latter, lower profits.

For the quarter ended Dec 31, 2014, The Hour Glass saw net profit increase 7 per cent year on year to S$14.84 million, boosted in part by higher contributions from associates. Total revenue and other income climbed 4 per cent to S$187.44 million while earnings per share for the quarter under review worked out to 2.1 Singapore cents, up from 1.96 Singapore cents.

Despite a more competitive retail environment, gross margin improved from 22.8 per cent to 23.2 per cent while share of results of associates clocked S$1.48 million, up from just S$664,000 in the corresponding quarter a year earlier.

Meanwhile, Cortina's net profit for the third quarter slumped 39.5 per cent to S$2.79 million.

Its revenue was also lower, down 8.9 per cent year on year to S$97.73 million as China's anti-extravagance campaigns have hit global demand for luxury goods, while earnings per share were 1.7 Singapore cents, down from 2.8 Singapore cents a year ago. Operating expenses increased by 6.3 per cent to S$16.9 million in Q3FY15.

Both groups said that currency fluctuations would likely have an impact on demand going forward.

"The recent de-pegging of the Swiss franc from the Euro and regional currency fluctuations will impact consumer sentiment and the demand for luxury watches and goods," The Hour Glass warned.

Cortina said: "The global luxury markets are facing great challenges as tourists arrival and spending in the region remain subdued. Fluctuations in currency exchange rates, notably the Swiss Franc and the Malaysian Ringgit, would have impact on the group's operating results. Despite all these, the group remains committed to its expansion plans and will manage its risks based on the group's strategy."

Cortina plans to open a 5,500-square-foot boutique in Marina Square, while its existing Patek Philippe boutique at ION and the Paragon boutique will be expanded this year. Shares in The Hour Glass closed at 76 Singapore cents on Wednesday, down one Singapore cent. Cortina was up 1.5 Singapore cents to 82 Singapore cents.