SINGAPORE (April 27): Thakral Corporation has posted earnings of $1.5 million for the first quarter ended March 31, an increase of 142% compared to earnings of $625,000 a year ago.
Revenue in 1Q was halved to $36.9 million, from $80.3 million in the first quarter last year.
This was mainly due to a decline in revenue from its lifestyle segment, which fell to $29.7 million in 1Q17, compared to revenue of $74.7 million a year ago.
This is attributed to a switch in Thakral’s focus to higher margin items, as well as the reduction in supplies of certain mobility products from 2Q last year.
The decline in group revenue was partially mitigated by a 29% increase in revenue from its investment division. Investment revenue rose to $7.2 million in 1Q17, from $5.6 million a year ago.
Despite the revenue decline, gross profit grew 25% to $10.5 million, from $8.5 million a year ago. This was as a result of a 63% reduction in cost of sales to $26.4 million, which outpaced the decline in revenue.
Gross profit margin improved to 28.6%, compared to 10.5% previously.
Cash and cash equivalents stood at $11.6 million as at March 31, 2017.
“The strategy we made a few years ago to move away from electronic products and increase focus on higher margin products in beauty and wellness has proven to be a right move, with business momentum picking up and profits for the Lifestyle Division starting to stream in,” says Natarajan Subramaniam, Thakral’s independent non-executive chairman.
“In addition to investments in real estate projects, Thakral’s Investment Division is also increasing its focus on retirement resorts through the group’s GemLife retirement living joint venture,” he says.
Shares of Thakral closed 3 cents lower at 30 cents on Thursday.