Duty Free International Limited (DFI), the largest multi-channel duty-free and duty-paid retail group in Malaysia, in which Gebr Heinemann holds a 10% stake, has announced net profit after tax increased 24.8% to RM77m ($17.7m) from RM61.7m for the financial year ended February 28 2017 (FY2017).
DFI’s parent company DFZ Capital Berhard entered into a joint-venture with Heinemann Asia Pacific in June 2016 with two seats on the board of directors – Max Heinemann and Marvin von Plato. DFI operates more than 40 retail outlets in Malaysia, on the border to Thailand and Singapore as well as duty-free shops in airports.
DFI ended the fourth quarter (Q4) of FY2017 with revenue down slightly by 7.4% to RM150m compared to RM162m the previous year.
The decrease was mainly due to a slowdown in tourism traffic to and from Thailand following the flood in Southern Thailand during the quarter and the after effects of the demise of Thai King Bhumibol in October 2016, as well as the imposition of a Goods and Services Tax at border outlets and duty-free zones with effect from 1 January 2017. On a full year basis, the Group reported an increase of 4.6% in revenue to RM632.6m for FY2017, from RM604.5m in FY2016.
The profit before income tax in Q4, RM25.1m, was RM3.6m lower compared to RM28.7m in the same period in 2016 due to a decrease in revenue as mentioned above, coupled with an increase in management fee and lower reversal of inventories written down in the current quarter.
On a full year basis, the Group reported an increase of 15.7% in profit before income tax to RM97.8m for FY2017, from RM84.5m in FY2016. The increase was mainly due to the overall increase in revenue and an increase in net foreign exchange gain of RM9.9m compared to the net foreign exchange loss of RM7m in FY2016. There was a recognition of gain arising from changes in the fair value of options amounting to RM4m, as well as lower professional fees incurred by RM1.6m in FY2017 when compared to FY2016.
The above mentioned however, was partially offset by higher rental expenses and higher employee benefits expenses for FY2017.
DFI executive director Lee Sze Siang commented on the FY2017 results: “We continue to face the challenges of the current economy and the volatility of the USD-Ringgit exchange rate, as well as the impact of unforeseen occurrences of the flood in Southern Thailand and effects of the demise of Thai King Bhumibol. Nevertheless, we have already started the process of improving our business operations, enhancing our merchandise mix and revamping our outlets. As we continue to focus on improving our operational efficiency and better managing our costs, we are confident of overcoming the challenging and competitive business environment.”