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Parkson Retail Asia’s Latest Earnings: What Investors Need to Know

Parkson Retail Asia (SGX: O9E) operates departmental stores across cities in Malaysia, Vietnam, Indonesia and Myanmar. Yesterday, the firm announced its financial results for the full-year ended 30 June 2017 (FY2017).

Here’s a quick rundown on the financial figures:

1. Revenue for FY2017 was S$412.7 million, an increase of 6.3% year-on-year. The improvement was mainly due to higher direct sales that were in line with the firm’s forays into various apparel brands since FY2016.

2. However, for the latest year, Parkson Retail recorded a net loss of S$59.5 million. A year ago, the firm clocked in a net profit of S$30.2 million. The net loss for the year was mainly due to a pre-tax loss on the back of significant non-operational items recorded, and higher taxation for the period.

3. Turning our attention to the balance sheet, as at 30 June 2017, the company had S$63.3 million in cash with no debt. This is a deterioration of 9% from the S$69.5 million cash (and zero debt) that it had on 30 June 2016.

4. Cash flow from operations was at S$51.2 million and S$51.6 million was spent on capital expenditure. There was no free cash flow to speak of for the year. However, this is still an improvement from the negative free cash flow of S$45.9 million in FY2016.

Parkson Retail faced negative same store sales growth (SSSG) in all its operating countries except Malaysia.

In Malaysia, SSSG grew 2.8% in FY2017. On the other hand, Myanmar saw the largest drop in SSSG at 26.4% due to changes in its operations – a store closed down in January 2017 in Yangon to make way for another store in the same city in March 2017.

No dividend was declared for the final quarter. A year ago, shareholders received a final dividend of 0.5 Singapore cent per share.

Looking ahead, the firm said:

“The Group’s performance in the next reporting quarter ending 30 September 2017, in particular for our Malaysia and Indonesia operations, will be impacted by lesser festive spending following the shift in Hari Raya / Lebaran calendar.

For the 12 months ending 30 June 2018, the Group’s operating environments are expected to remain challenging over fragile consumer sentiment and increased political and societal uncertainties. To mitigate these challenges, the Group will exercise vigilance in pursuing our strategy to transform Parkson into a lifestyle concept retail business.”

Shares of the retailer closed at S$0.073 yesterday.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.