Duty-free retailer Atlan profit tumbles 69% in Q2 on rising cost and write-offs


KUALA LUMPUR: Duty-free retailer and automotive component maker Atlan Holdings Bhd reported a steep drop in quarterly earnings, as the company struggled with higher cost amid flattish sales.

Net profit in the second quarter ended Aug 31 fell 69% to RM4.09mil compared with RM13mil made a year earlier.

Revenue slipped 2% to RM167mil compared with RM170mil previously, a filing with Bursa Malaysia today showed.

"The group continues to focus on expanding its market presence and increasing its efforts to strengthen operational efficiencies together with close monitoring of the key cost drivers, in order to stay competitive and profitable in the remaining quarters of the financial year ending Feb 29, 2020," Atlan said.

Pre-tax profit contribution from duty free business, which made up about two-third of the group's total revenue, was halved to RM6.5mil.

The company said the drop was due to lower profit margin, higher professional fees, higher inventory written down as well as higher property, plant and equipment written off.

The property, plant and equipment written off was mainly due to closure of certain outlets in Kuala Lumpur International Airport 2.

In the automotive segment, its pre-tax profit declined 49% to RM2.9mil due higher wages and material cost.

The weaker ringgit, Atlan said, resulted in more expensive imported materials.

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Atlan , duty-free

   

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