Duty Free International fiscal 1Q loss narrows even as revenue falls further

Malaysia ringgit notesMalaysia ringgit notes

Duty Free International reported Wednesday its fiscal first quarter loss narrowed to 219,000 ringgit from 7.15 million ringgit in the year-ago period amid lower rental and employee benefits costs, even as outlets were closed amid Malaysia’s efforts to curb the spread of the Covid-19 virus.

The group reported a profit attributable to owners of the company of 248,000 ringgit for the quarter ended 31 May, swinging from a 5.16 million ringgit loss in the year-ago quarter, Duty Free International said in a filing to SGX.

Revenue dropped 22.6 percent on-year to 33.45 million ringgit in the quarter, the filing said, attributing the decline to the closure of the majority of the retail outlets from 1 March to 31 May of this year, compared with closures in 2020 rom 18 March to 31 May.

“Only certain outlets in the group that were not at the Malaysia Thai border and the airports were in operations with low sales recorded due to subdued consumer demand,” Duty Free International said.

Rental of premises dropped 81 percent on-year to 895,000 ringgit for the quarter as landlords granted 3.1 million ringgit of rental reductions, while employee benefits expenses declined 48.9 percent on-year to 3.34 million ringgit on downsizing of manpower and salary reductions, the filing said.

A grim outlook

The retailer issued a grim outlook, citing Malaysia’s current full movement control order (FMCO) nationwide since 1 June, with international borders closed amid a rise in Covid-19 cases.

“All outlets in the group have ceased operations for the time being. It is still unknown when the FMCO will be uplifted and retail shops are allowed to be opened,” Duty Free International said.

“With the uncertainties surrounding the timing of the re-opening of the international borders coupled with consumer consumption that is anticipated to remain weak due to the lingering impact of movement restrictions and adverse economic effect, the group expects the business environment to remain challenging for the rest of the financial year,” it added.