SK Jewellery reported Friday its third quarter net profit dropped 57.9 percent on-year to S$459,000 after the cessation of SK Bullion’s operations in May 2019.
Revenue for the quarter ended 30 September fell 46.2 percent on-year to S$32.61 million, the company said in a filing to SGX.
Other gains in the third quarter fell to S$10,000, compared with S$360,000 in the year-ago period, on the realized fair value loss on derivative financial instruments as a result of SK Bullion ceasing operations, partly offset by a mark-to-market S$40,000 revaluation gain on a gold loan, the filing said.
Depreciation and amortization expenses surged to S$6.31 million from S$1.13 million in the year-ago quarter on changes to accounting for leases, SK Jewellery said.
Material costs fell 62.4 percent on-year to S$17.05 million on changes in product mix and on SK Bullion ceasing operations, the retailer said.
For the nine-month period, the company reported net profit dropped 11.3 percent on-year to S$3.25 million on revenue of S$103.99 million, down 29.7 percent on-year.
SK Bullion had been a 70 percent-owned subsidiary of SK Jewellery. The company had previously said it decided to cease SK Bullion’s operations to reduce its operating losses amid decreasing demand for its bullion products and increasing compliance costs.
The company issued a cautious outlook.
“The challenges in the retail sector are expected to persist in view of continuing uncertainty in the macroeconomic environment. Continuing tensions between Japan and Korea, Brexit and the Sino-U.S. trade war have contributed towards a pessimistic consumer outlook,” SK Jewellery said.
The company said it would continue to work to provide novel shopping experiences and introduce new product lines, and it was continuing to expand into China’s market via a franchise model after opening two stores in Chong Qing Raffles City and Chengdu JinNu recently.