Second Chance Q1 profit down 90% to S$218,000 on securities losses

MAINBOARD-LISTED Second Chance Properties saw first-quarter net profit plummet 90 per cent to S$218,000 for the three months ended Nov 30, 2018, compared to S$2.23 million in the year-ago period, it said in a results release on Thursday night after the market closed.

This was despite revenue rising 5.7 per cent to S$6.47 million from S$6.12 million in the year-ago period. Revenue from its apparel, gold and securities segments rose, though properties revenue fell 4.7 per cent. Profit from operations was also steady at S$2.5 million.

Contributing the most to the loss was its securities segment, which reported a S$0.95 million loss in the first quarter of the 2019 financial year, compared to a S$0.97 million profit in Q1 2018. This was mainly because, in the new financial year, an unrealised loss of S$2.09 million was recorded on financial assets held for trading purposes, compared to an unrealised gain of S$0.04 million in the year-ago period, said Second Chance.

Earnings per share were 0.03 Singapore cent, compared to 0.3 Singapore cent in the year-ago period. No dividend was declared.

Looking ahead, Second Chance noted that Singapore's economic growth is expected to slow in 2019. In Malaysia, the company retains only its flagship First Lady apparel store, having closed all other retail outlets there, but this flagship is expected to be profitable. For Singapore retail, Second Chance said: "First Lady Singapore is facing great challenges mainly from stiff competition, and changes have been implemented to reverse the losses."

Second Chance expects its gold business to remain profitable, but noted that downward pressure on retail rents coupled with loss of rental income from properties sold will result in lower rental income in its properties segment.

Second Chance shares closed unchanged at 22 Singapore cents on Thursday before the results announcement.