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Y Ventures 2018 loss widens to US$3.6m, to streamline operations

E-COMMERCE company Y Ventures said it is streamlining operations and focusing on online book distribution, as its 2018 net loss widened to US$3.6 million from US$769,069 a year ago. This comes on the back of increased cost of sales and expenses, offset by a divestment in its subsidiary.

Loss per share for the year ended Dec 31, 2018, was 1.8 US cents from 0.4 US cent a year ago. Net asset value per share stood at 1.7 US cents as at end-2018, from 3.1 US cents the year before. There is no dividend, unchanged from a year ago, the group said in a regulatory filing on Thursday.

Shares for the group last traded at S$0.056 apiece on Feb 27.

Revenue rose 27.9 per cent to US$18.1 million from US$14.1 million the year before as sales of goods for online marketplaces rose to US$17.5 million from US$13.6 million a year ago. Service income grew to US$553,343, up from US$507,962 the year before. The sales increase was mainly due to book sales, which grew to about US$14.6 million from US$12 million the year prior, which was the result of bringing on board new book publishers in fiscal 2017.

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Non-book sales increased to US$2.9 million from US$1.6 million the year before, mainly attributable to revenue contributed by subsidiary Faire Holdings, which is involved in the Faire leather brand; along with increase in product sales on online marketplaces in South-east Asia. Meanwhile, service income revenue was largely derived from the group’s waste management services, which have remained relatively stable, Y Ventures said.

Cost of sales widened to US$12.6 million from US$8.2 million a year ago, mainly from an increase in costs of products, logistics, inward freight and handling charges, and allowance for obsolete inventories.

Administrative expenses widened further to US$5.1 million from US$3.5 million a year ago, largely due to one-off expenses which include allowance for doubtful receivable, bad debts written off and impairment loss of financial asset carrying at fair value and professional fees. Professional fees were largely incurred by subsidiary Luminore 8 before Y Venture’s divestment to 20 per cent.

In addition, the company incurred one-time start up costs and expenses from its geographical expansion into China and Malaysia, and placed resources into research and development for new brands/products and technology tools to embark on a supplementary services-based model for its e-commerce business.

The group said it would be streamlining operations to improve cost and operating efficiency and also look at strategic alliances with new brand partners to strengthen revenue streams. It will also focus its efforts in the online distribution of books and embark on a supplementary based model for its e-commerce business. Meanwhile, it will actively consolidate the distribution of non-book categories while “remaining vigilant” on cost and cashflow.

Y Ventures is also currently in the process of appointing an independent reviewer to assess its internal controls and the impact of adjustments to prior years' financial statements. This is being carried out after the Singapore Exchange raised questions about accounting errors in the company's previous financial reports.