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For the current quarter, the Group reported a marginally higher profit before taxation ("PBT") of RM13.76 million as compared to the PBT of RM13.65 million reported for 1Q16.
Despite the revenue had decreased 16.7% to RM137.18 million as compared to RM164.71 million reported for 1Q16, PBT was marginally higher due to gain on disposal of a property amounting to RM2.99 million. Excluding this gain on disposal of a property, the Group would have recorded a PBT of RM10.77 million as compared to RM13.65 million in the preceding year.1Q17 vs. 4Q16
For the current quarter under review, the Group posted a PBT of RM13.76 million as compared to RM9.07 million in the preceding quarter ended 30 June 2016.
The increase in PBT was attributable to gain on disposal of a property amounting to RM2.99 million during the current quarter under review. Excluding this gain on disposal of a property, the Group would have recorded a PBT of RM10.77. The revenue for the current quarter under review had decreased by RM22.65 million or 14.2% to RM137.18 million as compared to RM159.83 million reported in the preceding quarter. The operating expenses had also reduced to RM 72.60 million as compared to RM 80.11 million incurred in 4Q16.
A lower PBT in 4Q16 also attributable to impairment losses arising from fair value adjustments on investment property and property, plant and equipment amounting to RM2.66 million and RM1.23 million respectively. In addition, there are impairment losses of trade receivables of RM1.37 million and write off of inventories of RM0.08 million respectively. Excluding these impairment losses and write off, the Group would have recorded a PBT of RM14.41 million.
The retail sector has becoming more challenging due to rising costs of doing business, weakening Ringgit has driven up the merchandise costs. The rising cost of living and weaker Ringgit has deteriorated the consumer spending power. Weak commodity prices which the country is based upon, has also negatively affecting consumer sentiments.
Giving the uncertain economic outlook, the Group's prospects for the remaining financial year are expected to be challenging. With the continue increase in the merchandise costs due to the weakened Ringgit, the Group will continue to monitor its operating costs and cautiously adjust its selling price to cope with falling gross margin. The Group will also embark on business consolidation by closing down of non-performing outlets, cost saving and rationalisation of business direction to increase efficiency and productivity as well as cessation of certain underperforming licensed brands under the Group's portfolio.
Moving forward, the Group will focus and channel the resources on house brands namely, Bonia, Braun Buffel, Carlo Rino and Sembonia as well as continue its expansion plan in overseas markets, in particularly Indonesia and some Middle East countries.