Office furniture maker Versalink widens fiscal 2019 loss to RM7m

VERSALINK on Monday said its net loss widened to RM7.0 million (S$2.3 million) for the full year ended Feb 28, 2019, from a RM2.5 million loss the year prior.

This is on the back of lower contributions from its exports and domestic segments, the Malaysia-based office furniture maker said in a regulatory filing.

Loss per share widened to 5.17 sen, from 1.87 sen a year ago. No dividend has been declared, unchanged from a year ago. Shares in the group was trading flat at S$0.135 on Monday at 1.04pm.

The net asset value of the group stood at 40.2 sen per share, down from 45.8 sen a year ago.

Revenue for the year tumbled 19 per cent to RM50.7 million, from RM62.7 million a year ago, from lower revenue from both its export and domestic segments. Export segment revenue dropped to RM30.3 million, from RM31.2 million a year ago. The domestic segment, meanwhile, dropped to RM20.4 million, from RM31.4 million a year ago.

There was also a drop in the number of tendered projects of sizeable value secured from contractors and distributors, with further impact from lower sales revenue for the group's retail businesses.

Other items of income also fell 25.2 per cent to RM1.2 million, from 1.5 million a year ago. This was due to lower interest income and lower write-back of allowance for impairment on trade receivables. However, this was partially offset by RM500,000 of interest compensation on debt recovery of trade receivables.

Other losses widened to RM4.2 million, from RM1.9 million a year ago, from higher allowance for impairment of trade receivables of around RM3.8 million for fiscal 2019. This was partially offset by lower plant and equipment written off, amortisation and writing off of intangible assets and bad debt being written off for fiscal 2018.

The group also recorded a 16.7 per cent drop in marketing expenses to RM7.9 million, from RM9.5 million a year ago, from decreased staff costs, commission, rental of showroom, depreciation expenses and drawing and design fees. This was partially offset by an increase in consultancy fees of around RM100,000.

For the next 12 month, the group foresees its operating performance to continue being affected by "challenges and uncertainties arising from the global and Malaysia economy".

It said it will continue exploring and developing new business opportunities in Malaysia and overseas, while managing costs and maximising shareholder value.

"The group shall remain prudent in lieu of the challenging market environment to sustain business growth in both Malaysia and overseas," it added.