SINGAPORE (May 9): ValueMax reported earnings of $6.2 million for the 1Q18 ended March, up 25.3% from $4.9 million in 1Q17 on higher other operating income.
Revenue for the quarter fell 6.5% to $57.2 million from $61.1 million previously due to lower revenue from its retail and trading of jewellery and gold business, although this was offset in part by higher revenue from the group’s pawnbroking and moneylending businesses.
In line with the revenue decrease, cost of sales fell 12% to $44.9 million from $51.1 million in 1Q17.
Over the quarter, ValueMax received interest income of $0.2 million, but paid interest expenses and net income tax of $1.9 million and $0.6 million, respectively. This was due to higher trade and other receivables but significantly lower proportion of trade in other payables and other liabilities.
Administrative expenses grew 18.6% to $5.6 million from $4.7 million a year ago as a result of depreciation and amortisation expenses, as well as higher employee benefits expenses and rental expenses.
Other operating income however helped to boost the group’s bottomline for the quarter by registering a 68% growth to $1.3 million, while share of results of associates grew by 25.2% to $0.8 million due to higher contributions from the group’s Malaysian associated companies.
The group also booked a foreign currency gain of $0.2 million compared to a loss of $0.1 million a year ago.
In its outlook, ValueMax says it expects gold prices to remain volatile in FY18 given current economic and geopolitical uncertainties, while its pawnbroking business continues to face challenges from keen competition, rising operating costs and uncertain interest rate movements.
The group intends to grow its moneylending business as well as explore acquisition opportunities to expand its network of pawnbroking and retail outlets.
Shares in ValueMax closed 1.7% lower at 30 cents on Wednesday.