Parkson profitable in Q3, boost from China ops

Parkson Department Store at central HuaiHai Road, Shanghai. - Filepic

KUALA LUMPUR: Parkson Holdings Bhd posted net profit of RM25.30mil in the third quarter ended March 31, 2018 – a stark contrast from the net loss of RM33.24mil a year ago – boosted by its China operations.

The department store owner and operator said on Thursday its revenue was slightly lower at RM1.061bil compared with RM1.062bil a year ago. Earnings per share were 2.37 sen compared with loss per share of 3.11 sen.

Parkson said its China retail stores benefited from the higher traffic flow during the Chinese New Year festivities, the other retail regions reported weaker sales after the Christmas and year-end promotions. 

However, it was upbeat on the fourth quarter ending June 30, 2018 as the retail operations were expected to benefit from the Hari Raya Aidilfitri celebrations in Malaysia and Indonesia while the other regions were expected to see lower traffic flow in the retail stores.

“The group sees ample opportunities and positive signs ahead with the emergence of 'new retail' in China. The group has yielded many encouraging returns from its new retail initiatives,” it said.

“On the Southeast Asia front, the group remains cautiously optimistic as the resilience of the group's performance hinges on the extent of consumer sentiment recovery. The group will continue to drive topline growth proactively whilst exercising prudence on operating costs and new investments,” it said. 

Commenting on the Q3 revenue, it said China contributed RM726.95mil in revenue, a slight decline compared with RM733.42mil a year ago.

Malaysia accounted for RM267.76mil, up 10% from the RM244.16mil a year ago; Vietnam and Myanmar RM19.76mil or down 20% from the RM24.73mil a year ago. Revenue from Indonesia fell 35% to RM31.76mil from RM48.62mil.

China recorded more than 100% jump in profit to RM54.92mil from RM20.57mil. Malaysia recorded wider loss of RM10mil compared with RM4.22mil a year ago, losses at Vietnam and Myanmar widened to RM3.56mil from RM535,000. Indonesia managed to reduce the losses to RM6.33mil from RM16.60mil.

For the nine months ended March 31, 2018 (9M FY18), Parkson posted wider net losses of RM32.10mil compared with RM23.14mil in the previous corresponding period ended March 31, 2017 (9M FY17).  This was despite higher revenue of RM3.04bil from RM2.98bil.

Notes to the accounts showed in the 9M of FY18, there was an loss on exceptional item totaling RM36.71mil. This comprised of an impairment loss on intangible assets of RM24.53mil and impairment loss on investment in an associate of RM11.23mil while impairment loss on other receivables was RM1.05mil.

In 9M FY2017, there was an exceptional gain of RM481.63mil. This comprised of a gain of RM802mil from the disposal of a subsidiary. However, it was offset by an impairment loss on investment in an associate of RM308.95mil and impairment loss on other receivables of RM11.762mil.