MALAYSIA. Duty Free International has reported a 12.2% year-on-year revenue decrease to RM388.8 million (US$95 million) in the nine months ended 30 November.

The Malaysian company posted positive third quarter results though, with revenue up 19.3% year-on-year to RM157.0 million (US$38.3 million). Duty Free International attributed the improvement to an increase in demand for certain products and an enhanced sales mix.

In the first nine months, profit before tax fell was down slightly (0.3%) to RM51.9 million (US$12.7 million). Both net profit after income tax as well as net profit attributable to owners of the company increased, by 10.9% and 12.9% respectively.

Duty Free International said this was mainly due to the net foreign exchange gain of RM6.8 million (US1.7 million) in the first nine months of its 2019 financial year, compared to a net foreign exchange loss of RM13.3 million (US$3.2 million) in the year-before period. The net foreign exchange gain was attributable to the weakened Malaysian ringgit against the Singapore dollar and US dollar.

Source: Duty Free International (Click on image to enlarge).

In the third quarter, profit before tax grew +142.9% to RM20.6 million (US$5 million). This was largely attributable to a higher revenue recorded as well as a net foreign exchange gain of RM1.5 million (US$366,000) in the quarter [compared to a net foreign exchange loss of RM7.5 million (US$1.8 million) in the year-before period].

The net foreign exchange gain was also due to the weakening of the Malaysian ringgit against the Singapore dollar and US dollar, as noted above. The group’s deposits in various financial institutions underwent a currency translation to Malaysian Ringgit in the period.

Duty Free International declared a second interim dividend of S$0.01 per share for the third quarter, which brings the dividend per share amount declared to date to a total of S$0.018 per share.

The Zon Duty Free: Duty Free International’s key retail brand, with stores in airports across Malaysia.

Looking ahead, the company said it expected the operating environment to remain challenging “given the current economic outlook and cautious consumer spending”. It said it would “continue its efforts to identify new market opportunities and strategies to further strengthen its customer base and distribution channels through a wider product offering”.

Duty Free International said it would also “intensify marketing efforts and closely monitor key cost drivers to remain competitive and profitable for the remaining quarters of the financial year”, which ends on 28 February 2019.