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Parkson still in the red with RM13.8m 2Q net loss

KUALA LUMPUR (Feb 26): Parkson Holdings Bhd remained in the red for its fourth consecutive quarter, reporting a net loss of RM13.87 million or 1.3 sen per share for the second quarter ended Dec 31, 2017 (2QFY18), compared to its net profit of RM72.67 million or 6.76 sen per share in 2QFY17.

Revenue for the quarter increased 2% to RM1.064 billion from RM1.046 billion in the previous year.

Based on its financial statements, the group's profitability for the quarter was affected by two exceptional items, namely a RM24.53 million impairment loss on intangible assets and another RM11.13 million in impairment loss on investment in an associate.

While Parkson also saw a significant RM308.95 million impairment in the previous year's corresponding quarter, it was offset by an RM802.3 million gain on disposal.

For the first half of its financial year (1HFY18), its net loss stood at RM57.4 million versus net profit of RM10.09 million, while revenue was up 3% at RM1.981 billion from RM1.924 billion.

The group said its Malaysia and Indonesia operations posted operating losses for the period, which was attributed to the absence of festive spending, following the shift in Eid celebrations, posting operating losses of RM20 million and RM13 million respectively.

As at Dec 31, 2017, Parkson Malaysia has 45 stores following the opening of two stores in Kuantan and Johor Bahru, while two underperforming stores were closed down during 1HFY18. It also closed two stores in Jakarta, bringing its store count in Indonesia to 15.

Meanwhile, the group has seen returns from the transformation strategies implemented for Parkson China, resulting in a 4% increase in revenue to RM1.319 billion and RM32 million in operating profit for the six-month period.

On the other hand, Parkson Vietnam saw negative same store sales growth of 5% due to intense competition, while the contribution from the Myanmar operations remained negligible.

Looking ahead, the group said higher spending during the Chinese New Year celebrations will support its performance in 3QFY18.

"The group remains confident in our China retailing operations and believes that the group's transformation strategies focusing on diversified retail formats coupled with stores' network optimisation and products offering enhancement, are keeping the group on the right track.

"While the group's operating environment in the Southeast Asian region is anticipated to remain challenging over subdued consumer sentiment and stiff competition, the group will continue to monitor its strategy execution as well as stores' performance," it said.

Parkson fell 0.5 sen or 1% to close at 49.5 sen, giving a market capitalisation of RM533.6 million. — theedgemarkets.com

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