Duty Free International posts fiscal 2Q net profit dropped 61 percent

Malaysia ringgit notesMalaysia ringgit notes

Duty Free International reported Wednesday its fiscal second quarter net profit dropped 60.8 percent on-year to 5.3 million ringgit (S$1.74 million) on changes to accounting for leases, lower profit margin and lower foreign-exchange gains.

Revenue for the quarter ended 31 August edged up 0.2 percent on-year to 114.7 million ringgit, the operator of duty-free retail shops in Peninsular Malaysia said in a filing to SGX. The revenue increase was mainly due to Brand Connect Group, which was acquired in August 2018, partly offset by lower revenue from trading of duty-free goods and non-dutiable merchandise, the retailer said.

The unrealized foreign exchange gain for the quarter was 1.0 million ringgit, down from 4.0 million ringgit in the year-ago quarter, mainly due to the weakening of the Malaysian ringgit against the U.S. dollar, Duty Free International said.

Depreciation and amortization rose 149.7 percent on-year to 3.7 million ringgit in the quarter, while rental expenses fell 33.2 percent on-year to 7.7 million ringgit due to changes in accounting for leases, the filing said.

Duty Free International also said it wrote off 400,000 ringgit of property, plant and equipment in the quarter, mainly on the closure of some outlets in the Kuala Lumpur International Airport 2.

Total financial expenses for the quarter were 1.7 million ringgit, up from 100,000 ringgit in the year-ago quarter, mainly on changes to accounting for leases and a higher utilization of trade facilities, the filing said.

The retailer declared an interim dividend of 0.5 Singapore cent a share, compared with no dividend in the year-ago period.

Duty Free International said it expected the business outlook would remain “challenging,” given the weaker ringgit, competitive business environment and economic conditions in other countries.

For the six month period ended 31 August, the company reported net profit fell 44.2 percent on-year to 13.2 million ringgit on revenue of 250.4 million ringgit, up 8.0 percent on-year.

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