KUALA LUMPUR (June 26): Mynews Holdings Bhd, the country’s second-largest convenience store chain operator, posted a net loss of RM2.33 million in the second quarter ended April 30, 2020 (2QFY20) -  its first quarterly loss since it was listed in 2016.

In contrast, the company posted a net profit of RM7.95 million in the previous corresponding quarter.

The quarterly losses were mainly due to the COVID-19 pandemic.

Quarterly revenue fell 7.14% to RM123.49 million from RM132.98 million in the previous corresponding quarter.

“The COVID-19 pandemic had been the major contributing factor to the total loss of RM3.49 million before taxation. This loss included RM2.8 million incurred by the FPC (food processing centre) when production output was adversely affected due to fluctuation in sales.

“The pandemic which badly affected the travel industry had also caused the loss of RM0.3 million from the jointly controlled entity, WH Smith,” according to its filing with Bursa Malaysia.

It added that the temporary closure of 30% of its outlets and lower daily sales at outlets that remained open during the Movement Control Order period also contributed to the quarterly losses.

The company also attributed the weaker earnings to higher administrative expenses.

The total number of outlets stands at 539 as at 2QFY20, an increase by 83 compared with 456 outlets a year ago.

Another contributing factor to the loss was bad debts of RM439,000 written off.

The dismal quarterly performance has dragged its cumulative six-month performance (6MFY20). It reported a whopping 87.53% drop in net profit to RM2.02 million against RM16.19 million a year ago, although its revenue grew nearly 3% to RM264.07 million compared with RM256.48 million in the same period last year.

“Continuous efforts are being placed to increase efficiencies and optimise costs. Mynews is also aligning its business strategies to the 'new normal', repositioning itself to stay competitive and agile in facing the impending economic slowdown and new consumer sentiments following the COVID-19 pandemic,” it added.

Shares of Mynews traded 0.5 sen or 0.72% lower at 68.5 sen, bringing it a market capitalisation of RM467.28 million. For the past year, the stock has fallen 50% from RM1.38.