Maxi-Cash reports 2018 net profit fell 22 percent amid higher costs

Maxi-Cash outlet in Singapore’s Little India neighborhood; taken October 2018.Maxi-Cash outlet in Singapore’s Little India neighborhood.

Pawnbroker Maxi-Cash reported on Friday its 2018 net profit fell 22 percent on-year to S$10.38 million amid higher expenses.

Revenue for the full year rose 6 percent on-year to S$203.65 million, it said in a filing to SGX after the market close on Friday.

“The increase in revenue was primarily attributed to higher interest income from the pawnbroking business, higher sales from the retail and trading of jewelry and branded merchandise business and contribution from the secured lending business,” Maxi-Cash said in the statement.

The pawnbroking business’ revenue rose around 4.8 percent in the year to S$41.11 million, mainly on higher interest income as the pledge book grew, while the retail and trading of jewelry and branded merchandise business posted a 1.2 percent revenue rise to S$153.60 million, it said.

Revenue from money-lending rose to S$8.94 million for the year, up from S$1.88 million in 2017, it said.

But employee benefits expenses increased 16 percent on-year in 2018 to S$19.64 million, finance costs rose 47 percent to S$11.02 million and other operating expenses increased 33 percent to S$33.22 million, Maxi-Cash said.

It proposed a final dividend of 0.35 Singapore cent, down from 0.7 Singapore cent a year-earlier.

It issued a cautious outlook.

“Arising from the U.S.-China trade tension, the resulting global economic uncertainties are likely to impact the growth of the countries that the group has operations in. This, coupled with rising interest rates, higher operating costs, volatile gold prices, fluctuating exchange rates and keen competition continue to pose challenges,” Maxi-Cash said.

“In view of these challenges, the group will continue to explore new markets, products and services,” it added.

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