KUALA LUMPUR (Aug 20): Lower sales in both retail and the manufacturing and wholesale segments have dragged the net profit of Tomei Consolidated Bhd's second quarter down 93% year-on-year.

The softening of international gold prices also affected gross margin in its manufacturing and wholesale segment.

For the quarter ended June 30, 2018, Tomei's net profit slumped to RM394,000 from RM5.64 million a year ago, as revenue fell 23% to RM129.58 million from RM169.17 million, the group's stock exchange filing today showed.

Earnings per share retreated to 0.28 sen from 4.07 sen.

For the cumulative six months ended June 30 (1HFY18), Tomei's net profit fell 71% y-o-y to RM2.89 million or 2.09 sen per share, from RM9.96 million or 7.18 sen per share, while revenue declined 17% to RM279.53 million from RM334.85 million.

On prospects, Tomei said the escalating tension that arose from the trade war between the US and China has resulted in much volatility in the market, in particular on international gold prices and the movement of foreign direct investments into emerging markets.

“On the local front, our government’s initiative to replace the Goods & Services Tax with the Sales & Services Tax is seen as a move that could put more money into consumers’ pocket and could spur spending,” said Tomei.

“The group will vigilantly monitor these latest developments and will take the necessary actions to improve sales and sustain its profitability for the remaining part of FY18,” Tomei added.

Tomei’s shares closed unchanged at 53 sen for a market capitalisation of RM73.46 million.