Review of Current Quarter Performance versus Corresponding Quarter Last Year
Performance of the Convenience Stores segment for the current quarter was adversely affected by the Full Movement Control Order w.e.f. 1 June 2021. Essentially, stores were operating under stricter SOPs with reduced operating hours, thereby affecting customer footfall and sales productivity. In comparison to previous year corresponding quarter, the country was under Recovery Movement Control Order, where interstate travel was allowed back then. In this regard, Revenue declined by RM100.7m or -19.9% to RM404.6m, with a decrease across all product categories, resulting in a decline in Gross Profits by RM37.3m or -23.4% to RM122.0m.
Operating expenses decreased by RM16.7m or -10.4%, largely due to lower wages from better manpower planning, shorter operating hours and lower shrinkages. Excluding corporate exercise expenses, the convenience store segment recorded a core Loss After Tax of RM1.2m.
Meanwhile, Revenue from the Pharmaceutical segment for the current quarter increased by RM103.4m or +60.1% to RM275.6m, in tandem with continued consumer focus on personal well-being and overall healthcare. Additionally, the acquisition of The Pill House and Wellings group contributed a Revenue of RM78.3m for the current quarter. Correspondingly, Profit After Tax increased by RM9.0m or +111.9% to RM17.1m.
Corporate exercise expenses of RM7.0m primarily consists of professional fees for issuance of Medium Term Notes, finance cost for the acquisition of Caring Group, amortisation of intangible assets and fair value gain from investments in quoted shares.
The Group’s consolidated Profit after Tax for the current quarter after corporate exercise expenses is reported at RM8.9m, a decrease of RM6.9m or -43.6%.
Review of 9 Months Period Performance versus Corresponding Period Last Year
Revenue from the Convenience Stores segment declined by RM345.6m or -21.1% to RM1,290.4m with most product categories recording lower Revenue, thereby resulting in lower Gross Profits. Excluding corporate exercise expenses, the Convenience Store segment recorded a core Profit After Tax of RM14.5m, a decline of RM23.1m or 61.4%.
Revenue from Pharmaceutical segment increased by RM412.3m or +132.5% to RM723.6m. While Profit After Tax closed at RM30.3m. The acquisition of The Pill House and Wellings group contributed Revenue of RM187.2m.
The Group’s consolidated Profit After Tax for the 9 months ended 30 September 2021 after corporate exercise expenses is reported at RM26.0m.
PROSPECTS
With the ongoing National Recovery Plan and relaxation of SOPs (i.e. inter-state travels and social activities allowed for fully vaccinated individuals etc.) while achieving higher vaccination rates in the country, the Group is optimistic on the turnaround in trading conditions and the Group's operating results is poised to gradually improve in the coming quarters.
