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Second Chance Properties Q2 net profit falls 23.1% to S$1.4m

MAINBOARD-LISTED Second Chance Properties on Monday posted a 23.1 per cent drop in net profit in its second quarter ended Feb 29, despite a slight increase in revenue.

The difference was due mainly to a fair-value loss on financial assets of S$0.7 million in the second quarter this year, compared to a fair-value gain of S$0.2 million last year.

The company also recorded an increase in its cost of sales, which accounted for S$3.6 million, up 1.4 per cent from 2019.

Revenue edged up 2.3 per cent to S$7.2 million, from S$7.0 million in Q2 2019.

Earnings per share slid to 0.19 Singapore cents, from 0.24 cents a year ago.

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For the six months ended Feb 29, the company booked  a 72.5 per cent increase in its net profit to S$3.5 million, while revenue grew 0.31 per cent.

This was mainly due to a higher unrealised loss of S$1.9 million on fair valuation of financial assets in the second half last year,  compared to an unrealised loss of S$1.0 million this year.

The group maintained its position that if there is no further escalation of the US-China trade war, the Singapore economy is expected to show modest economic growth in 2020.

Revenue from its gold business for the six months rose 7.0 per cent to S$7.4 million, though rental revenue from its apparel business fell 16.6 per cent to S$1.2 million, mainly because its biggest outlet in Singapore was closed, but also because of a fall in the selling price of apparel, and the shift towards online shopping.

The group said: “The apparel business in both Singapore and Malaysia is facing great challenges mainly from stiff competition and the trend of online shopping, which is expected to continue.”

“The gold business is expected to remain profitable, but the loss of rental income from properties sold coupled with negative rental revisions will result in lower rental income for the group,” it added. 

Second Chance Properties shares closed unchanged at S$0.17 on Monday before the results were released.

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