KUALA LUMPUR (Feb 26): Parkson Holdings Bhd continues to record losses despite improvements in its Malaysian retailing operations, with net loss widening to RM37.57 million in its second quarter ended Dec 31, 2018 (2QFY19), from RM13.87 million in the year-ago quarter.

This is notwithstanding the group having largely held its revenue steady at RM1.05 billion, which is just a marginal 1% less from the last corresponding quarter's RM1.06 billion.

The weaker 2QFY19 pushes Parkson's cumulative net loss for the first half of FY19 (1HFY19) to RM80.58 million, 40.4% more than the RM57.40 million it recorded in 1HFY18, while revenue slipped 0.2% to RM1.978 billion from RM1.981 billion.

Parkson's exchange filing today showed that savings arising from rationalisation of stores and improved operating efficiencies in Malaysia have resulted in operating loss narrowing considerably to RM1 million in 1HFY19, from RM15 million in the same period a year ago.

The closure and downsizing of its underperforming stores over the years also helped lower operating loss in Indonesia, which recorded a slight decline in same store sales (SSS) of 0.2% for the period.

However, this was offset by lower operating profit recorded in its China operations, mainly because SSS declined 3%, while its Myanmar and Vietnam divisions recorded higher operating loss of RM12 million due to Vietnam's ops registering an 18% decline in SSS, and the closure of Parkson's only store in Myanmar as well as one store in Vietnam.

Its other division — comprising businesses of consumer financing, food and beverage (F&B) operation and investment holding — also reported a higher operating loss of RM18 million, due to foreign exchange losses, it said.

Going forward, Parkson expects its retailing division to benefit from the seasonally higher consumer spending during the Chinese New Year festivities in February.

"While the group's operating environment is expected to be challenging amid the macroeconomic environment and market uncertainties, the group believes that its transformation strategy focusing on diversified retail formats, enhanced brands and product offerings will pave way for the group to grow steadily," it added.

As at end-December 2018, Parkson Malaysia has 45 stores, 46 stores over 30 cities across China, five stores in Vietnam, and 16 stores in Indonesia.

Shares in Parkson slipped half a sen or 2.1% to close at 23.5 sen today, valuing the retailer at RM250.79 million.