Duty Free International has reported first quarter revenue up + 37.9% to MR192.6m ($48.7m) in its first quarter ending 31 May 2016, compared with MR139.7m ($35.3m) over the same period in 2015.

 

The leading Malaysian duty free operator said that this was mainly due to improved prices relating to certain products, as well as new revenue contributed from the recently opened outlets at Kuala Lumpur International Airport 2 (KLIA 2).

 

INVENTORY VALUE CHANGES

The retailer said: “Changes in inventories comprised the difference in the value of inventories at the beginning and at the end of the financial period reported on. In 1Q FY2017, the value of the closing inventories was lower than the value of the opening inventories by MR57.9m

 

“In 1Q FY2016, the value of the closing inventories was higher by MR23.8m. This resulted in a variance of MR81.7m for 1Q FY2017 vis-à-vis 1Q FY2016, which was mainly due to timing differences in purchases and consumption of inventories in the respective quarters.”

 

 

MALAYSIA AIRPORTS’ RENTS RISE

Meanwhile, rents to Malaysia Airports and ‘certain retail outlets’ also increased by 20.3% or MR2.0m up from MR9.8m in 1Q FY2016 to MR11.8m in 1Q FY2017, with DFI reporting that this was due mainly to rental expenses incurred for its outlets located in the Zon Johor Bahru. Rentals also rose at KLIA2, which commenced business in August 2015.

 

DFI added that the company reported a profit before income tax of MR25.1m for 1Q FY2017, which was +28.3% or MR5.5m higher than the MR19.6m recorded in 1Q FY2016. The company added that this was mainly due to a rise in revenue, coupled with a higher net foreign exchange gain of MR1.4m.

 

CHALLENGING ENVIRONMENT AHEAD…

Looking forward, the company said that it expects its operating environment ‘to remain challenging’. It added: “The Group will continue its efforts in enhancing operational efficiency, stringent cost control measures, intensifying marketing efforts and improving its core business by exploring further business opportunities and strategies.”

 

As reported, DFI entered into a sales and purchase agreement to dispose of a 10% equity interest plus one share in DFZ Capital Berhad last March to a wholly owned subsidiary of Heinemann Asia Pacific Pte. It also holds further options to dispose a maximum of 15% equity interest in DFZ .

 

See also: http://www.trbusiness.com/regional-news/asia-pacific/dfi-deal-with-heinemann-an-expansion-platform/105871 and http://www.trbusiness.com/regional-news/asia-pacific/atlan-to-sell-up-to-25-in-dfi-to-heinemann/103005