Sales decreases in Macau and Hong Kong dragged down the interim net profit of Tse Sui Luen (TSL) Jewellery (International) Ltd by 24.1 per cent year-on-year for the first half of its fiscal year ended August 31.
According to the company’s filing with the Hong Kong Stock Exchange yesterday, its net profit attributable to owners of the company amounted to HK$11.7 million (US$1.5 million) for the six months, a decrease of HK$3.8 million, compared to HK$15.5 million for the same period last year.
For the half-year period, the group’s turnover dropped by 11.6 per cent year-on-year to HK$1.55 billion, compared to HK$1.75 billion one year ago. In particular, those generated from Hong Kong and Macau slumped by 32 per cent year-on-year to HK$592.1 million, down from HK$867.6 million.
‘Hong Kong and Macau businesses witnessed a continuation in the drop of the number of tourists visiting from Mainland China together with a weakening in their overall consumption sentiment,’ the jewellery retailer noted in the filing, ‘all of which conspired to result in a decrease in overall tourist and other customer’s spending in these markets’.
It added that the sales decrease in the two cities was also driven by an increase in gold prices of more than 6.9 per cent for the first half, which resulted in the total weight of gold sold in the period falling by almost 27 per cent.
According to the filing, the company’s same-store sales for all businesses in the two Special Administrative Regions recorded a drop of 31.4 per cent year-on-year.
Sales in Mainland up
However, the jewellery seller saw its retail business in the mainland register year-on-year growth of five per cent, amounting to HK$934.1 million, compared to HK$860.2 million one year ago. In addition, same-store sales in the country rose slightly by 1.5 per cent year-on-year during the six months.
Projecting the business environment in Hong Kong and Macau would remain ‘challenging,’ TSL believes the demand for luxury jewellery from the mainland market, especially from the rising middle class in the country, will remain strong.
‘The rising disposable income, in particular among the female population, and the rising women’s job market participation rate, is the strong force behind this belief,’ it explained.
For the first fiscal half, the company declared an interim dividend of 1.5 HK cents per ordinary share, which is the same as that for the first half for the previous financial year.
