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Stamford Tyres posts Q2 losses on poorer sales, closure costs
DESPITE cutting expenditure, Stamford Tyres' revenue for the second quarter did not manage to cover costs, causing the mainboard-listed tyre and wheel distributor to sink into the red.
The company, which had guided for losses just days before the release of its financial results, on Thursday reported losses of S$867,000 for the second quarter ended October. In contrast, the bottom line for the year-ago period was S$19,000.
In a press statement, it said that the loss for the quarter included a one-time cost of S$400,000 relating to the closure of a loss-making operation in Queensland, Australia.
Revenue declined to S$53 million, 16.8 per cent lower year-on-year from S$63.7 million generated a year ago. This was primarily due to lower sales in South-east Asia and the rationalisation of non-profitable operations in China and Queensland. Expenditure declined by 15 per cent to S$54.9 million, which outstripped the top line.
Also, its half-yearly bottom line saw red ink of S$741,000, reversing from earnings of S$131,000 a year ago. Revenue was down 11 per cent from S$121.7 million to S$108.3 million.
Consequently, loss per share was 0.37 Singapore cent, versus earnings per share of 0.01 cent for the year-ago period. Its net asset value per share was 51.64 Singapore cents as at Oct 31, marginally lower than the 52.34 cents as at Apr 30.
Stamford Tyres' president Wee Kok Wah said: "The global economic outlook remains challenging. To address the challenges arising from the global oversupply of tyres and the intense market competition, the group has deployed resources and implemented strategies to diversify its product offerings to adapt to the ongoing market changes. We have also taken more steps to right-size our operations and this is reflected in the lowering of operating costs during the year."
Stamford Tyres shares closed flat at S$0.22 on Thursday before the results were announced.