Challenger Technologies reported first quarter net profit attributable to owners fell 22 percent on-year to S$4.08 million as margins were pinched by competitive pricing in the “difficult” IT retail market and an increase in operating expenses.
It also pointed to lower rebates from vendors and higher tradeshow sales.
Revenue for the quarter ended 31 March increased 4 percent on year to S$80.93 million on improved performance from the IT products and services business, mainly from tradeshow sales, the consumer electronics retailer said in a filing to SGX.
“We expanded on our trade show participation and achieved our highest show sales ever in the first quarter of 2019,” CEO Loo Leong Thye said in the statement. “Despite higher sales achieved, gross profit margin dropped significantly although we managed to increase our retail and online sales slightly.”
Employee benefits expenses increased by 5 percent on-year in the quarter to S$5.76 million on greater use of part-time workers, Challenger said.
Challenger plans to open three new stores — at Jewel Changi, West Coast Plaza and Paya Lebar Quarter — by the second half of this year, while closing the Great World City and Thomson Plaza stores, the filing said.
“Even though the retail market continues to be tough, we hope to capture sales in new locations we are currently not present in,” Loo said.
Challenger currently has a total 39 stores.
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