This article first appeared in The Edge Financial Daily, on May 6, 2016.

KUALA LUMPUR: Wing Tai Malaysia Bhd recorded its first quarterly net loss of RM941,000 or 0.2 sen per share for the third financial quarter ended March 31, 2016 (3QFY16), due to dwindling contributions from its property development and retail divisions.

The group posted a net profit of RM8.49 million or 2.63 sen per share for 3QFY15.

Revenue declined 24.71% to RM62.48 million in 3QFY16 from RM82.99 million in 3QFY15.

In a filing with Bursa Malaysia yesterday, Wing Tai said net profit for the nine months ended March 31, 2016 (9MFY16), halved to RM21.39 million from RM52.31 million a year ago, while revenue declined 14.59% to RM213.36 million from RM249.8 million.

The group said its property development segment slipped into the red to the tune of RM4.16 million in 3QFY16 from a profit of RM2.33 million in 3QFY15.

Its retail division, meanwhile, saw profit plunge 90.3% to RM701,000 from RM7.23 million in 3QFY15.

Wing Tai said revenue from the property development division declined to RM53.9 million in 9MFY16 from RM91.9 million in 9MFY15 due to lower revenue recognition from the group’s northern region projects, which were substantially completed in September 2015.

Despite the lower revenue, the property development division recorded a marginally higher operating profit of RM19 million in 9MFY16 compared with RM16.5 million in 9MFY15 due to the recognition of net claims against a contractor, arising from the settlement of final contract accounts for one of the subsidiary’s completed projects in 9MFY16.

As for the retail division, despite higher revenue of RM137.5 million in 9MFY16 against RM136.3 million in 9MFY15, operating profit was lower at RM9.2 million compared with RM19.4 million a year ago.

This, the group said, was due to a lower gross profit margin on the back of currency depreciation, higher sales discounts and fair value changes on the derivative financial instruments.

Dorothy Perkins, Topshop, Topman and Uniqlo are among several international brands that Wing Tai retails in Malaysia.

Wing Tai added that with the currency volatility and subdued consumer sentiment, the retail and property outlook is expected to be challenging in the current financial year.

Wing Tai shares closed unchanged at RM1.18 yesterday, with a market capitalisation of RM560.47 million.