Battered retailer profits dented by acts of violence
Updated: 2019-11-29 07:36
By Oswald Chan in Hong Kong(HK Edition)
Hong Kong-listed retailer Best Mart 360 reported on Wednesday a 6 percent year-on-year decline in net profit for the six months ending on Sept 30, despite its HK$610 million ($78 million) revenue, up 14.7 percent compared with last year, during the same period.
The snack chain attributed the drop to frequent vandalism and arson that have severely disrupted its business operations, as well as a plunge in the number of visitors who have been turned off by protest violence plaguing the city since mid-June. Its profit attributable to owners was HK$13.4 million.
The retailer, whose owner is of Fujian origin and has been accused of alleged involvement in an indiscriminate attack on protesters in Yuen Long on July 21, has seen many of its stores vandalized and torched by black-clad rioters.
"The sluggish domestic demand, the notable drop of arrival tourists' consumption expenditure, and the effects of the social movement on the normal operation of the group were the principal factors that heavily struck the expansion plan and business performance of the group in Hong Kong during the period under review," the retailer's chairman, Lin Tsz-fung, said in a statement filed to the Hong Kong Stock Exchange on Wednesday.
The board of directors recommended paying an interim dividend of 1.5 Hong Kong cents per share for the six months ended Sept 30.
As the social unrest dragged on, the group received offers for short-term rental reductions of approximately 3 to 30 percent for periods ranging from one to six months, a response to the deterioration in the overall business environment in Hong Kong.
Looking ahead, the retailer said it will optimize its product structure to suit market needs and demand in an unstable economic environment.
Furthermore, the retailer had begun a feasibility study on opening retail business on the Chinese mainland, and has scheduled the opening of its first mainland store in the next financial year. The group said it would also actively extend its retail network in Macao.
(HK Edition 11/29/2019 page4)