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10 Quick Things That Investors Should Know About Best World International Limited’s 2017 Earnings

Best World International Limited (SGX: 5ER) is a direct-selling company that deals with a wide range of healthcare products. The company has three business segments, namely direct sales, export sales and wholesale.

At the end of February, Best World released its full year earnings update for 2017. Let’s look at 10 key highlights from its latest report:

1. Sales was up 10% year-on-year to S$220.9 million, driven by sales growth in China.

2. Gross profit for 2017 grew 3.8% year-on-year to S$152.6 million.

3. Net profit jumped by 60.3% year-on-year to S$55.1 million, benefiting from higher sales revenue, and lower distribution costs.

4. Earnings per share (EPS) was up by 61.1% year-on-year to 10.12 cents.

5. Gross margin for FY2017 was 69.1%, down from 73.2% in FY2016. The lower margins was due to a change in sales mix to higher export sales.

6. In 2017, Best World generated operating cash flow of S$57.2 million, up from S$20.2 million in 2016. The increase in operating cash flow was driven by higher profitability in 2017 compared to 2016.

7. On 31 December 2017, Best World’s borrowing was S$7.4 million while its cash and bank balances was S$82.2 million, giving it a net debt position of S$74.5 million.

8. Moving on to its business segments, the direct selling business reported a 8% year-on-year decline in revenue to S$109.9 million. Export sales was up 97.9% year-on-year to S$106.5 million.  Wholesale revenue had a 2.7% year-on-year decline in sales to S$4.5 million.

9. Best World recommended a final dividend per share of 2.6 cents. Together with its interim dividend, the company’s total dividend per share will be 4.1 cents in 2017.

10. Executive Director and Group Chief Operating Officer, Mr Huang Ban Chin, gave the following comments on its results:

“Despite the prevailing macroeconomic headwinds, we are pleased to deliver yet another strong set of results for FY2017. Our endeavours in the China market continue to pay off with growth momentum sustaining throughout the period.

Moving forward, we have several initiatives being lined up; such as the change in business model from Export Segment to Direct Selling and the expansion of our direct selling coverage in China. With a result oriented and motivated team, we believe that this is the beginning of a new growth era for us.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.