Moodie Davitt snapshot: Duty Free International results Q3 2018 (ended 30 November 2017)
– Foreign exchange losses drive -67.7% profits fall to US$2.12 million – Sales +0.4% to US$33.34 million – Heinemann Asia Pacific (HAP) completed a second tranche call option to purchase another 5% of DFI subsidiary DFZ Capital Sdn Bhd1 (DFZ) for €9.85 million. – HAP’s equity interest in DFZ is now 15% plus one share. Source: The Moodie Davitt Report |
MALAYSIA. Duty Free International (DFI) has posted a +0.4% increase in third-quarter sales for the period ended 30 November 2017, to RM133.5 million (US$33.34 million). However pre-tax profit fell by -67.7% by RM17.8 million (US$4.45 million) to RM8.5 million (US$2.12 million)
The duty free and duty paid retailer runs the ZON Duty Free brand across airports, duty free zones, seaports, borders and other tourist destinations in Malaysia.
The profits slump was driven by a net foreign exchange loss of RM7.5 million (US$1.87 million). This was due to the strengthening of the Malaysian Ringgit against the Singapore Dollar and US Dollar by around +3.5% and +4.2%, respectively, quarter-on-quarter.
A decrease of -28.5% (RM20.8 million/US$5.20 million) in pre-tax profit for the nine months ended 30 November 2017 was also attributed to a net foreign exchange loss of RM13.3 million (US$3.32 million). The Malaysian Ringgit strengthened over the period by around +3.8% and +7.9%, respectively, against the Singapore Dollar and US Dollar.Sales for the nine months fell -6.9% to RMB449.4 million (US$112.31 million).
However, the negative effect was partially offset by lower financial expenses, professional fees and transportation costs.
Heinemann increases stake
DFI also announced that Heinemann Asia Pacific Ltd (HAP) exercised a second tranche call option at the end of Q3. The German travel retailer purchased 5% of the issued and paid-up share capital of DFI subsidiary DFZ Capital Sdn Bhd (DFZ) for €9.85 million.
The move was part of the 2016 sale and purchase agreement between the two companies, when HAP purchased a 10% stake in DFZ for €19.7 million in cash, with an option to increase its stake by another 15%. HAP’s equity interest in DFZ is now 15% plus one share.
