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Quarterly Reports

Quarterly Report For The Financial Period Ended 31 March 2017

Financials Archive

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Unaudited Interim Financial Report For The Quarter Ended 31 March 2017
Condensed Consolidated Statement Of Comprehensive Income

Condensed Consolidated Statement Of Comprehensive Income

Unaudited Interim Financial Report For The Quarter Ended 31 March 2017
Condensed Consolidated Statement Of Financial Position

Condensed Consolidated Statement Of Financial Position

Review of Performance of the Company and its Subsidiaries

3Q17 vs 3Q16

For the current quarter, the Group reported a higher profit before taxation ("PBT") of RM9.83 million as compared to the PBT of RM8.52 million reported in the previous corresponding quarter.

Despite the revenue had dropped 7.2% to RM150.71 million, from RM162.43 million in the same period last year, PBT was higher mainly due to improvement in gross profit margin ("GPM") and better control in operating costs. The Group has adjusted its pricing strategy by introducing higher-margin products, reducing discounts given out as compared to last year as well as adjusted the prices for new product ranges, in particularly for Bonia and Braun Buffel brands. Other income had also increased from RM1.4 million to RM2.6 million mainly due to recovery of doubtful debts of RM0.75 million which had been provided for in the previous financial year.

3Q17 YTD vs 3Q16 YTD

For the 9 months FY2017, the Group's revenue decreased by RM45.83 million or 9.1% as compared to the corresponding cumulative quarters in the preceding year. In view of the fragile consumer spendings and softening retail environment, the Group has embarked on a series of consolidation and rationalisation process by closing down of a number of non-performing boutiques and consignment counters, in particularly for licensed brands, be more selective on store openings as well as improve productivity. This has caused the revenue dropped by 9.1% which is within our expectation.

Despite the decrease in revenue, the Group posted an improved PBT of RM43.84 million, which is 18.9% higher than the PBT of RM36.87 million reported in the preceding year. Earnings increased due to improvement in GPM and the Group's continuous efforts in controlling its operating cost.

Prospect

The retail sector has becoming more challenging due to rising costs of doing business, weakened Ringgit has driven up the merchandise costs. The rising cost of living and weaken Ringgit has deteriorated the consumer spending power.

Giving the uncertain economic outlook, the Group's prospects for the remaining financial year are expected to be challenging. With the continue increase in imported 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 continue its business consolidation by closing down of non-performing outlets, improve gross margins by improving the sourcing of products and continue to reorganizing its retail operations and brand positioning to increase efficiency and productivity.

Moving forward, the Group will focus and channel the resources on house brands namely, Bonia, Braun Buffel, Carlo Rino and Sembonia, consolidate and improve the performance of its licensed brands, continue to develop and strengthen its overseas markets, in particularly Indonesia, Vietnam and some Middle East countries.


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