Sa Sa International Holdings reports drop in profits
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Hong Kong-based Sa Sa International Holdings has reported a drop in profits of 37.3 percent for the first six months, due to a poor retail environment in the mainland with a poor tourist footfall.
Profits fell to HK$96 million as retail sales dropped by 3.6 percent in Hong Kong and Macau, which attributes 80 percent to the company’s turnover.
Turnover fell 4 percent to HK$3.63 billion year on year while total sales transactions grew 2.3 percent after six quarters of decreasing transaction volume.
Guy Look, Chief Financial Officer and Executive Director, said, “Obviously it could be better. In Hong Kong, we have tried for the last 15 months or so to gain market share, to increase competitiveness. I think what has been important in the first half of this year is that we feel we are moving in the right direction in terms of providing what the market wants.”
Sales in Taiwan and Singapore fell 22.8 percent and 11 percent respectively, which is said to have hindered profits. The company is said to be downsizing in the markets and will be making rental cuts in Hong Kong and Macau of 40 to 50 percent.
Questions & Answers
Q.What was the main reason for the significant drop in Sa Sa International Holdings' profits?
What was the main reason for the significant drop in Sa Sa International Holdings' profits?
The company attributed the drop in profits to a poor retail environment in mainland China, which resulted in reduced tourist footfall. This impacted sales in Hong Kong and Macau, where most of the company's turnover is generated.
Q.How much did retail sales decline in Sa Sa International Holdings' core markets of Hong Kong and Macau?
How much did retail sales decline in Sa Sa International Holdings' core markets of Hong Kong and Macau?
Retail sales in Hong Kong and Macau collectively dropped by 3.6 percent during the first six months. These regions are crucial for the company, accounting for 80 percent of its total turnover.
Q.What specific actions is Sa Sa International Holdings taking to address its financial performance?
What specific actions is Sa Sa International Holdings taking to address its financial performance?
The company plans to downsize in markets like Taiwan and Singapore, where sales have fallen. Also, it intends to negotiate rental cuts of 40 to 50 percent in its Hong Kong and Macau operations.
Q.Did Sa Sa International Holdings experience growth in any key performance indicators despite the profit drop?
Did Sa Sa International Holdings experience growth in any key performance indicators despite the profit drop?
Yes, despite the overall decline in profits and turnover, the company reported a 2.3 percent growth in total sales transactions. This followed six consecutive quarters of decreasing transaction volume, suggesting an improvement in customer engagement.
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