BEST World International posted a 15.2 per cent drop in net profit to S$40.4 million for the three months ended Dec 31, 2023, from S$47.7 million in the corresponding quarter a year ago.
This translated into an earnings per share of S$0.0937, down from the S$0.1087 in Q4 2022, said the skincare and wellness product manufacturer in a bourse filing on Tuesday (Feb 27).
Revenue in Q4 2023 decreased 4.6 per cent to S$201.3 million, compared to S$211 million in the corresponding period last year.
“This was primarily due to the franchise segment in China experiencing weak consumer sentiment and ongoing macroeconomic challenges for FY2023, offsetting higher revenue from the direct selling segment,” noted the group.
Distribution costs also recorded a 40.5 per cent year-on-year increase to S$68.9 million from S$49 million in Q4 2022, as a result of higher expenses related to events, convention and exhibitions as well as higher freelance commission of the group’s direct selling segment.
The group added that due to higher revenue contribution from its direct selling segment, distribution costs, which consisted of freelance commissions for direct selling distributors and event expenses, increased 9.1 per cent to $156.9 million in FY2023 as compared to the previous financial year.
For FY2023, revenue decreased 7.7 per cent to S$514.5 million from S$557.3 million in FY2022 while net profit decreased by 11.7 per cent to S$120.4 million from S$136.3 million.
The group continues to expect growth headwinds for its China market in the coming year as uncertainties such as stock market volatility and challenges in the property sector continue to weigh on consumer sentiments and cloud consumers’ outlook.
In view of the potential economic volatility, supply chain disruptions and changing consumer behaviour, the group maintains a cautious outlook for the next 12 months.
The board of directors has recommended no dividend for FY2023, citing the uncertain business climate as their main concern.
Prior to the results release, shares of Best World closed flat at S$1.82.
