Isetan Singapore reports 1H21 swung to a net profit after year-earlier Circuit Breaker closure

Isetan department store at Singapore’s Orchard RoadIsetan department store at Singapore’s Orchard Road

Isetan Singapore reported Friday its first half swung to a net profit of S$1.25 million from a year-ago loss of S$317,000, mainly on stores being able to operate for the full six months after the year-earlier closure for the 7 April to 18 June Circuit Breaker period to stem the spread of the Covid-19 virus.

Revenue for the January-to-June period increased 12.84 percent on-year to S$38.37 million, the department store operator said in a filing to SGX.

Isetan Singapore posted higher sales of goods from the retail segment, higher consignment income and higher rental income form the Isetan Wisma Atria investment property.

“The improved revenue in the first half of 2021 was however affected by the discontinued operations of Jurong East store on 8 March 2020. Revenue from investment property correspondingly increased as well as compared to the same period last year where mandatory rental rebates were given to SME tenants in accordance with government measures in response to the Covid-19 pandemic. However, the recovery in revenue was disrupted by the Phase 2 Heightened Alert measures from 16 May 2021,” the company said.

Cautious outlook

The department store operator issued a cautious outlook.

“The retail environment remains challenging for the company as new clusters of Covid-19 cases continue to emerge. As such, the company still expects its sales revenue to be negatively impacted over the coming months. The duration and extent of this impact is difficult to predict at this point in time,” Isetan Singapore said.

But it pointed to a positive from the Singapore government’s plan to treat Covid-19 as endemic, with travel expected to resume by year-end.

Parkway Parade store

Isetan Singapore said its lease with Prime Asset Holdings for its Parkway Parade store will expire on 9 March 2022. As negotiations with the landlord didn’t yield a positive result, the lease won’t be extended, the company said.

“The company has no immediate plans to find a replacement store and will continue to maintain its retailing operations via its remaining stores at Shaw House, Tampines Mall and NEX,” Isetan Singapore said. “The financial effect of the eventual expiry of the lease for the current and next financial year cannot be reasonably estimated as at the date of this announcement.”

In addition, Isetan noted it appointed Savills (Singapore) in June to assess interest in the possible purchase of the company’s property at Wisma Atria.