SINGAPORE (Feb 27): Isetan has reported losses of $27.2 million for FY2019 ended December, nearly double its losses of $13.7 million back in FY2018. 

This was attributable primarily to the group’s impairment losses on right-of-use assets and property, plant and equipment amounting to some $22.7 million as a result of the adoption of SFRS(I) 16 from January 1, 2019. The group also booked impairment charges of $3.8 million on property, plant and equipment. 

Revenue for the year slid 8.4% to $7.1 million from $8.1 million in the previous year, due to a combination of lower sale of goods and consignment income from the retail segment, as well as by exiting brands due to store-wide renovation works done at the group’s flagship store at Shaw House. 

Segmentally, the group’s sale of goods fell 10.4% to $58.7 million from $65.5 million in FY2018, while consignment income fell 10.2% to $42 million. 

Isetan says that the majority of the renovation work was completed by end-2019 and the outstanding work is slated for completion by June this year. 

As at end-December, cash and cash equivalents stood at $39.3 million. 

Losses per share for the year came in at 65.91 cents compared to losses per share of 33.25 cents per share in FY2018. 

Despite the losses, the group is proposing a final tax-exempt cash dividend of five cents per ordinary share for FY2019, unchanged from the previous year. 

Payment of the dividend, if approved by shareholders at the forthcoming annual general meeting, will be made on May 18. 

Looking ahead, Isetan is bracing itself for a challenging year ahead in terms of operating conditions. 

“With the current uncertain global economic climate not showing clear signs of resolution in the near future, combined with rising business costs and intense competition within the retail industry, the company expects operating conditions will continue to be challenging in the next 12 months,” says Isetan. 

“In addition, unforeseen circumstances such as the Covid-19 outbreak is expected to adversely affect the retail industry,” it adds. “In view of the challenging environment in the retail industry, the company will continue to actively review its business strategies and make changes as appropriate.”

Shares in Isetan closed eight cents lower, or down 1.95%, at $4.02 on Thursday prior to the release of results.