PARKSON RETAIL GROUP LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
PARKSON RETAIL GROUP LIMITED
百 盛 商 業 集 團 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3368)
UNAUDITED THIRD QUARTERLY RESULTS ANNOUNCEMENT
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019
The board of directors (the "Board") of Parkson Retail Group Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company, its subsidiaries, a joint venture and associated companies (hereinafter collectively referred to as the "Group") for the quarter ended 30 September 2019.
The unaudited quarterly results of the Group are released in conjunction with the announcement of the quarterly results of Parkson Holdings Berhad, the holding company of the Company in Malaysia pursuant to the Bursa Malaysia Main Board Listing Requirements. This announcement is made pursuant to paragraph 13.09 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
HIGHLIGHTS
Total operating revenues for Third Quarter ("3Q2019") increased by 2.5% to RMB1,191.6 million. Total operating revenues for the First Nine Months of The Year ("9M2019") increased by 6.2% to RMB3,779.4 million.
Same store sales ("SSS") decreased by 5.0% in 3Q2019 and by 2.6% in 9M2019.
Profit from operations for 3Q2019 was RMB100.9 million. Profit from operations for 9M2019 increased by 221.9% to RMB458.0 million as compared to the same period last year.
Loss attributable to owners of the parent in 9M2019 increased by RMB12.6 million to RMB28.4 million as compared to the same period last year of RMB15.8 million.
Without the impact of International Financial Reporting Standard 16 Leases ("IFRS 16"), profit from operations for 9M2019 would increase by 93.4% to RMB275.2 million; profit attributable to owners of the parent in 9M2019 would be RMB70.2 million, a turnaround increase of RMB86.0 million as compared to the same period last year.
1
UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR
Gross Sales Proceeds (inclusive of value-added tax)
Revenues
Other operating revenues
Total operating revenues
Operating expenses
Purchases of goods and changes in inventories
Staff costs
Depreciation and amortisation Rental expenses
Other operating expenses
Total operating expenses
Profit from operations
Finance income
Finance costs
Share of profits of:
A joint venture
Associates
(Loss)/profit before income tax
Income tax expense
(Loss)/profit for the period
Attributable to: Owners of the parent Non-controlling interests
Quarter Ended | Year to Date | ||
30 September | Ended 30 September | ||
2019 | 2018 | 2019 | 2018 |
Unaudited | Unaudited | Unaudited | Unaudited |
RMB'000 | RMB'000 | RMB'000 | RMB'000 |
3,125,270 | 3,370,260 | 10,620,189 | 11,122,777 |
1,079,349 | 1,046,062 | 3,417,934 | 3,204,520 |
112,243 | 116,982 | 361,477 | 353,329 |
1,191,592 | 1,163,044 | 3,779,411 | 3,557,849 |
(542,688) | (492,264) | (1,680,510) | (1,444,406) |
(157,155) | (161,870) | (498,204) | (501,607) |
(173,826) | (65,683) | (520,024) | (191,535) |
(34,351) | (237,540) | (81,242) | (692,181) |
(182,631) | (189,455) | (541,390) | (585,811) |
(1,090,651) | (1,146,812) | (3,321,370) | (3,415,540) |
100,941 | 16,232 | 458,041 | 142,309 |
34,373 | 34,292 | 109,110 | 107,927 |
(160,399) | (54,272) | (490,552) | (151,414) |
2,559 | 3,651 | 9,993 | 12,184 |
1,298 | 450 | 4,405 | 3,484 |
(21,228) | 353 | 90,997 | 114,490 |
(27,180) | (30,134) | (103,322) | (111,047) |
(48,408) | (29,781) | (12,325) | 3,443 |
(52,313) | (33,461) | (28,427) | (15,811) |
3,905 | 3,680 | 16,102 | 19,254 |
2
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at | As at | |
30 September | 31 December | |
2019 | 2018 | |
Unaudited | Audited | |
RMB'000 | RMB'000 | |
NON-CURRENT ASSETS | ||
, | 3,738,366 | 3,894,419 |
Property plant and equipment | ||
Investment properties | 29,447 | 30,293 |
Right-of-use assets | 3,486,748 | - |
Prepaid land lease payment | 384,513 | 394,497 |
Intangible assets | 1,793,431 | 1,797,675 |
Investment in a joint venture | 38,510 | 28,517 |
Investment in associates | 39,197 | 34,792 |
Trade receivables | 62,248 | 91,596 |
Time deposits | 1,433,202 | 1,433,142 |
Other assets | 384,884 | 132,657 |
Deferred tax assets | 194,107 | 186,576 |
Total non-current assets | 11,584,653 | 8,024,164 |
CURRENT ASSETS | ||
Inventories | 386,863 | 350,083 |
Trade receivables | 267,396 | 290,183 |
Prepayment and other receivables | 522,172 | 490,462 |
Non-current assets classified as held for sale | 33,302 | - |
Financial assets at fair value through profit or loss | 476,833 | 544,593 |
Investment in principal guaranteed deposits | 413,350 | 664,780 |
Time deposits | 680,251 | 683,863 |
Cash and cash equivalents | 1,298,468 | 1,544,354 |
Total current assets | 4,078,635 | 4,568,318 |
CURRENT LIABILITIES | ||
Trade payables | (1,043,653) | (1,354,766) |
Contract liabilities | (675,065) | (782,389) |
Other payables and accruals | (533,204) | (719,515) |
Interest-bearing bank loans | (499,913) | (321,646) |
Lease liabilities | (447,281) | - |
Tax payable | (59,320) | (59,991) |
Total current liabilities | (3,258,436) | (3,238,307) |
NET CURRENT ASSETS | 820,199 | 1,330,011 |
TOTAL ASSETS LESS CURRENT LIABILITIES | 12,404,852 | 9,354,175 |
3
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at | As at | |
30 September | 31 December | |
2019 | 2018 | |
Unaudited | Audited | |
RMB'000 | RMB'000 | |
NON-CURRENT LIABILITIES | ||
Interest-bearing bank loans | (3,544,043) | (3,721,241) |
Long term payables | - | (727,970) |
Lease liabilities | (4,083,801) | - |
Deferred tax liabilities | (273,289) | (280,114) |
Total non-current liabilities | (7,901,133) | (4,729,325) |
NET ASSETS | 4,503,719 | 4,624,850 |
EQUITY | ||
Equity attributable to owners of the parent | ||
Issued capital | 55,477 | 55,477 |
Reserves | 4,321,371 | 4,454,462 |
4,376,848 | 4,509,939 | |
Non-controlling interests | 126,871 | 114,911 |
TOTAL EQUITY | 4,503,719 | 4,624,850 |
4
UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS
For the nine-months period ended 30 September 2019 Unaudited RMB'000
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Analysis of balances of cash and cash equivalents
Cash and bank balances
Non-pledged time deposits with original maturity of less than three months when acquired
Cash and cash equivalents
Time deposits
Investment in principal guaranteed deposits
Financial assets at fair value through profit or loss
Cash and cash equivalents, deposits and financial assets at fair value through profit or loss at end of the period
5
263,590
347,898
(857,374)
(245,886)
1,544,354
1,298,468
872,508
425,960
1,298,468
2,113,453
413,350
476,833
4,302,104
Impact of IFRS 16 on the consolidated statement of profit or loss
The Group adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initial adoption as an adjustment to the opening balance of retained earnings at 1 January 2019, and the comparative information for 2018 was not restated and continues to be reported under IAS 17.
The following tables show the adjustments recognised for each individual line item. Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided.
For the nine-month period ended 30 September 2019 | |||||||||||
(Unaudited) | |||||||||||
Results without | Impact of | Results as | |||||||||
IFRS 16 | IFRS 16 | reported | |||||||||
RMB'000 | RMB'000 | RMB'000 | |||||||||
Revenues | 3,460,960 | (43,026) | 3,417,934 | ||||||||
Other operating revenues | 342,445 | 19,032 | 361,477 | ||||||||
Depreciation and amortisation | (174,941) | (345,083) | (520,024) | ||||||||
Rental expenses | (633,458) | 552,216 | (81,242) | ||||||||
Other operating expenses | (541,090) | (300) | (541,390) | ||||||||
Profit from operations | 275,202 | 182,839 | 458,041 | ||||||||
Finance income | 87,440 | 21,670 | 109,110 | ||||||||
Finance costs | (169,283) | (321,269) | (490,552) | ||||||||
Share of profit of a joint venture | 10,536 | (543) | 9,993 | ||||||||
Share of profit of associates | 10,675 | (6,270) | 4,405 | ||||||||
Profit before income tax | 214,570 | (123,573) | 90,997 | ||||||||
Income tax expense | (127,412) | 24,090 | (103,322) | ||||||||
Profit/(loss) for the period | 87,158 | (99,483) | (12,325) | ||||||||
Attributable to: | |||||||||||
Owners of the parent | 70,245 | (98,672) | (28,427) | ||||||||
Non-controlling interests | 16,913 | (811) | 16,102 | ||||||||
87,158 | (99,483) | (12,325) |
6
Operation and Financial Review
Total operating revenues
The Group recorded unaudited gross sales proceeds ("GSP") of RMB3,125.3 million in 3Q2019 and RMB10,620.2 million in 9M2019, representing a decline of 7.3% and 4.5% in 3Q2019 and 9M2019 respectively as compared to the same period of last year. The decline in GSP was mainly due to the closure of underperforming department stores in 9M2019, as well as the decline in SSS. SSS decreased by 5.0% in 3Q2019 and by 2.6% in 9M2019.
Total operating revenues increased by 2.5% to RMB1,191.6 million in 3Q2019 and by 6.2% to RMB3,779.4 million for 9M2019. The increase was mainly attributable to (i) the increase in direct sales which was contributed by the strong sales performance of the Cosmetics & Accessories category and (ii) the credit service income generated by Parkson Credit Sdn Bhd which was acquired by the Group in October 2018.
The following table sets out a breakdown of our total merchandise sales through different channels for the periods indicated:
For the nine-month period ended 30 September | ||||||||||||||
2019 | 2018 | Year-on-year | ||||||||||||
RMB'000 | % of total | RMB'000 | % of total | change (%) | ||||||||||
Concessionaire sales | 6,682,437 | 76.8% | 7,290,682 | 81.2% | (8.3%) | |||||||||
Direct sales | 2,019,364 | 23.2% | 1,692,119 | 18.8% | 19.3% | |||||||||
8,701,801 | 100.0% | 8,982,801 | 100.0% | (3.1%) |
As a percentage of our total merchandise sales, direct sales increased in 9M2019 compared to 9M2018. This increase was primarily attributable to the significant growth in sales from our Cosmetics & Accessories category. The following table sets out a breakdown of merchandise sales mix for the periods indicated:
For the nine-month period ended 30 September | ||||
2019 | 2018 | |||
% of total merchandise sales | % of total merchandise sales | |||
Cosmetics & Accessories | 52.2% | 48.7% | ||
Fashion & Apparel | 39.9% | 42.4% | ||
Groceries & Perishables | 5.3% | 6.0% | ||
Household & Electrical | 2.6% | 2.9% | ||
100.0% | 100.0% |
7
Operating expenses
Total operating expenses excluding purchases of goods and changes in inventories decreased by 16.8% to RMB1,640.9 million in 9M2019. Under IFRS 16, rental expenses are replaced with depreciation expense on the right-of-use assets and interest expense on the lease liability. In 9M2019, RMB345.1 million of depreciation expense on the right-of-use assets was charged to depreciation and amortisation.
Without the impact of IFRS 16, total operating expenses excluding purchases of goods and changes in inventories decreased by 6.3% to RMB1,847.7 million in 9M2019 and by 2.6% on a same store basis. Decrease in depreciation charges from fully depreciated renovation of stores and the management's continuing cost control were the major savings.
Profit from operations
Profit from operations for 3Q2019 was RMB100.9 million. Profit from operations increased by 221.9% to RMB458.0 million in 9M2019 as compared to the same period last year.
Without the impact of IFRS 16, the Group would record profit from operations of RMB275.2 million in 9M2019, representing an increase of 93.4% from the same period last year.
Profit attributable to owners of the parent
The group recorded a loss attributable to owners of the parent of RMB52.3 million in 3Q2019 and RMB28.4 million in 9M2019.
Without the impact of IFRS 16, the Group would record a profit attributable to owners of the parent of RMB70.2 million in 9M2019, a turnaround increase of RMB86.0 million as compared to the loss attributable to owners of the parent of RMB15.8 million recorded for the same period last year.
During the period under review, Xi'an Lucky King Parkson Plaza Co., Ltd., an indirect wholly- owned subsidiary of the Company, entered into a property sale agreement with an independent third party to restructure its business. Going forward, the Group will continue to actively look for opportunities and upgrade existing stores to strengthen our position as the leading retailer in China.
In the third quarter of 2019, two underperforming stores were closed to better utilise resources. As at 30 September 2019, the Group operated and managed 39 department stores (including concept stores "Parkson Beauty"), a shopping mall, 2 Parkson Newcore Citymalls, supermarkets, fashion and food & beverage outlets in 28 major cities across China.
8
Acknowledgement
I would like to take this opportunity to thank the Board, management and all our staff for their hard work and dedication. I would also like to thank the shareholders and our loyal customers for their continued support to the Group.
On behalf of the Board
PARKSON RETAIL GROUP LIMITED
Tan Sri Cheng Heng Jem
Executive Director & Chairman
21 November 2019
As at the date of this announcement, the Executive Directors of the Company are Tan Sri Cheng Heng Jem and Ms. Juliana Cheng San San, the Non-executive Director is Dato' Sri Dr. Hou Kok Chung and the Independent Non-executive Directors are Dato' Fu Ah Kiow, Mr. Ko Desmond and Mr. Yau Ming Kim, Robert.
9
Attachments
- Original document
- Permalink
Disclaimer
Parkson Retail Group Ltd. published this content on 21 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 November 2019 08:55:06 UTC
