Revenue falls 1.2% to S$94.5 million but other expenses shoot up 89.6% to S$2.9 million
TYRE and wheel distributor Stamford Tyres reported a 75.1 per cent decrease in net profit for the half-year ended Oct 31 to S$401,000 from S$1.6 million in the previous corresponding period.
This was attributed to a decrease in revenue and increases in various expenses, said the company in a bourse filing on Friday (Dec 13) evening.
Revenue decreased 1.2 per cent to S$94.5 million primarily due to lower sales in the South-east Asia market, which is the company’s largest geographical segment.
Gross profit margin remained relatively stable at 25.3 per cent, compared to 25.6 per cent in the previous corresponding period.
Other operating expenses increased 89.6 per cent to S$2.9 million from S$1.5 million in the year-ago period.
Stamford Tyres attributed this to the lower write-back of provision for inventory obsolescence from the sale of slow-moving stocks previously provided for. This cost was S$1.6 million in this half, compared to S$200,000 in the previous corresponding period.
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The other significant change in costs were marketing and distribution expenses, which dropped 10.4 per cent or S$364,000.
On a per share basis, earnings fell to 0.17 Singapore cent from 0.68 cent.
No interim dividend for the half-year was recommended.
For the next 12 months, the group noted that the tyres business remains “challenging as a result of intense competition and major geopolitical and macroeconomic events globally”.
It will continue to improve its product mix, manage operating costs and build on its core markets in South-east Asia to mitigate this.
Shares of Stamford Tyres ended trading on Friday flat at S$0.225.
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