Pawn-shop operator ValueMax reported on Wednesday its 2018 net profit rose 6.3 percent on-year to S$20.29 million as pawnbroking and moneylending revenue increased.
Revenue for the year fell 12.8 percent on-year to S$208.71 million, it said in a filing to SGX after the market close on Wednesday.
For retail and trading of pre-owned jewelry and gold, revenue fell by S$37.9 million, while revenue from pawnbroking and moneylending increased by S$3.2 million and S$4.0 million, respectively, for the year, the filing said.
Cost of sales fell 18.3 percent on-year to S$161.23 million, as the cost for goods sold for retail and trading of pre-owned jewelry and gold declined by S$37.9 million, it said.
Other operating expenses more than doubled to S$1.94 million for the year, mainly on increased allowances for doubtful trade receivables, while administrative expenses increased 16.8 percent on-year to S$23.87 million, largely on higher employee benefits expenses as headcount rose, ValueMax said.
In its outlook, ValueMax noted that the price of gold has risen to above US$1,300 an ounce from around US$1,220 in November.
“With the U.S.-China trade tensions having a knock-on effect on economic growth forecasts and continued geopolitical uncertainties, gold price may remain volatile in FY2019,” ValueMax said. “Meanwhile, keen competition, rising operating costs and uncertain interest rate movements continue to pose challenges to the pawnbroking and moneylending businesses.”
ValueMax currently has 33 outlets in Singapore and 10 in Malaysia.