The $12 million decline in revenue includes $6.8 million of discontinued businesses and an $8.2 million reduction in shipments to FJ Benjamin’s Indonesian associate company, which began buying directly from some of its principals in April 2017.
Geographically, revenue from the fashion business in Southeast Asia grew 13% on the back of higher contributions from existing stores as well as new stores which opened after 2Q17. The growth in revenue from the fashion segment was however offset in part by revenue from the timepiece business, which declined by 17%.
Meanwhile, group operating expenses fell 20% over the quarter to $22.3 million following the implementation of cost controls, as well as the closure of non-performing stores, which in turn yielded savings of $5.7 million.
Staff costs fell 17% to $6.8 million from $8.2 million previously, while rental of premises declined 24% to $7.9 million compared to $10.3 million a year ago.
Other operating expenses also fell 18% to $5.9 million from $7.2 million previously.
As a result of the tighter inventory management and better full price sell-throughs, gross profit margin improved to 46% compared to 39% in 2Q17.
As at end-2017, FJ Benjamin generated positive cash flow of $10.3 million from operating activities; invested $0.5 million on shop fittings; and repaid bank borrowings and interest expenses of $4.6 million.
Noting the improvement of consumer sentiment in Southeast Asian economies, FJ Benjamin’s group CEO, Nash Benjamin, says the management is working hard to grow its business organically whilst exploring opportunities to expand in the consumer and lifestyle segments.
“We are pleased to report a return to profitability after a painful restructuring exercise which is now completed,” he adds.
See: FJ Benjamin's 1Q losses narrow; launches rights cum warrants issue
Shares in the group closed 1.3% lower at 7.7 cents on Monday.
