THE Hour Glass : AGS 0% posted a 9 per cent fall in net profit to S$79.5 million for its second half ended Mar 31, from S$87.8 million in the previous corresponding period.
The combination of geopolitical tensions, economic volatility and rising operating costs had dampened profitability for the year, the watch retailer said in a regulatory filing on Tuesday (May 28).
Earnings per share stood at 12.17 Singapore cents for the half-year period, down from 13.33 cents the previous year.
Revenue for H2 rose 1 per cent to S$571.3 million, from S$567.5 million a year earlier.
For the full year, revenue was up 1 per cent to S$1.13 billion, from S$1.12 billion the previous year. Net profit fell 9 per cent to S$156.5 million, however, from S$172.4 million a year earlier.
Higher operating costs, mainly attributable to marketing expenses, and a strong Singapore dollar had dampened earnings, the company said.
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A change in New Zealand’s tax regulations also resulted in a one-off deferred tax charge of S$4.7 million for the company, it added.
Michael Tay, group managing director of The Hour Glass, noted that the results reflect a cooling-off period in the high-end watch industry.
“There has been a significant shift in the global macro landscape this past year resulting in the collectible and luxury watch markets finding a new equilibrium,” he said.
“Challenging as it may be, we believe that this is clearly a positive for the sustainability of the overall sector.”
A final dividend of six Singapore cents per share was recommended for the year, unchanged from the year before, for shareholders’ approval at the upcoming annual general meeting. The date payable will be announced later.
Looking ahead, the company said consumer sentiment in the specialty watch market is likely to be tested in the near to mid term, as geopolitical tensions remain unabated and interest rates stay at their current high levels.
While the watch retailer foresees an industrywide slowdown, it expects to remain profitable in the next financial year.
Shares of The Hour Glass closed 0.6 per cent or S$0.01 higher at S$1.61 on Tuesday, before the results were released.
