SINGAPORE (Oct 10): Duty Free International (DFI) reported 2Q19 earnings fell 12.6% to RM12.3 million ($4.09 million), compared to RM14.1 million in 2Q18.
This brings 1H19 earnings to RM21.3 million, 26.7% lower than RM29.1 million in 1H19.
Revenue for the quarter was 21.8% lower at RM114.4 million from RM126.3 million last year, largely due to lower availability of certain popular products for sale.
During the quarter, the group recorded a profit from changes in inventories of RM6.88 million, compared to a loss of RM24.5 million a year ago, mainly due to consolidation of the inventories of the newly acquired Brand Connect Group as well as timing differences in purchases and consumption of inventories in the respective quarters.
DFI acquired a 70% stake in Brand Connect on Aug 8. Brand Connect is a group of companies that engage in the business of marketing and the trading, wholesale and retail distribution of alcohol and other beverage products across the Asia-Pacific region.
The group also recorded a gain from unrealised foreign exchange of RM4.04 million from a loss of RM0.48 million in the previous year, mainly attributable to the currency translation loss on group’s purchases from overseas suppliers as a result of weak MYR against USD.
The group did not declare any dividend this period, as compared to a 0.05 cents per share interim dividend declared the same time last year.
On the outlook, the group expects the operating environment to remain challenging on the back of rising inflationary cost and weak consumer sentiment.
However, the group says that it will continue its efforts to identify new market opportunities to further strengthen its customer base and distribution channel. It will also closely monitor key cost drivers and intensify marketing efforts to remain competitive and profitable for the remaining FY19 quarters.
Shares in DFI closed at 21 cents on Wednesday.