Parkson Retail Asia reports net loss of RM6.93 million for 2QFY17
KUCHING: Parkson Retail Asia Ltd ( PRA), the Southeast Asian arm of Parkson Holdings Bhd ( Parkson) has reported a net loss of RM6.93 million for the second quarter of fiscal year 2017 (2QFY17).
According to an update by the research arm of Public Investment Bank Bhd ( PublicInvest Research), this negative quarter led to a cumulative loss of RM23.16 million for the first half of FY17 (1HFY17).
This was a stark contrast to the core net profit of RM20.03 million seen in 1HFY16.
“This loss was mainly attributed to higher operating expenses that increased 11.9 per cent year over year (y- o-y) while staff costs also saw an increase of 17.1 per cent yo-y,” explained research arm.
Despite the disappointing results, PRA’s top-line did see a growth of 7.4 per cent y- o-y in 2QFY17 which contributed to a 4.2 per cent y- o-y growth for 1HFY17’s top-line to RM640.08 million.
Looking forward, the research arm expect PRA’s topline to be supported through contributions from PRA’s new stores and business ventures that are currently in their initial stages of operations.
“It will be a while however, before healthier margins are seen as these new operations will only contribute rising costs which remain a challenge to PRA in the near term,” the research arm opined.
Moreover, PRA’s sales mix has also seen some improvement as its 1HFY17 direct sales clocked in at 22.5 per cent of total sales, which was higher compared to the 19.4 per cent in 1HFY16.
The fashion and apparel segment, and cosmetic and accessories segment were slightly higher at 82.4 per cent of all sales compared to its previous contribution of 82.2 per cent in 1HFY16.
“Though small, we view this positively as these two segments contribute to higher margins to PRA,” said the research arm.
With these results in mind, PublicInvest Research retained its ‘neutral’ call on Parkson with an unchanged target price of RM0.72.