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Maxi-Cash FY2018 profit down by 22% to S$10.4 million
CATALIST-LISTED pawnbroker Maxi-Cash Financial Services Corp's full-year earnings suffered from the costs of its mounting debt, according to results released on Friday.
Net profit fell by 22 per cent to S$10.4 million, despite a 6 per cent year-on-year rise in revenue to S$203.7 million, on the back of higher staff costs, finance costs and other operating expenses.
The increase in finance costs was mainly due to more loans, as well as interest on multi-currency medium-term notes and amortisation of expenses associated with that notes scheme, the company said.
Meanwhile, operating expenses were up on professional fees for secured loans, as well as rent and unrealised currency losses.
Still, turnover improved on higher interest income from the core pawnbroking business, as well as more jewellery and branded merchandise sales, and contributions from the secured lending business.
Earnings per share stood at 1.03 Singapore cents, down from 1.63 Singapore cents previously.
Maxi-Cash said in its outlook statement that it "will continue to explore new markets, products and services", as it expects the growth of its operating markets to be affected by the trade war between the United States and China and the ensuing global economic uncertainty.
"This, coupled with rising interest rates, higher operating costs, volatile gold prices, fluctuating exchange rates and keen competition continue to pose challenges for the group's business in the coming year," it added.
The board has recommended a final dividend of 0.35 Singapore cent a share in cash and scrip, for a full-year payout of 0.95 Singapore cent a share, down from 1.2 Singapore cents the year before.
Maxi-Cash closed down by 0.1 Singapore cent, or 0.73 per cent, at S$0.136, before the results were out.