BEST World Internationa : CGN 0%l posted a 1.5 per cent drop in net profit to S$21.7 million for its third quarter ended September, from S$22.1 million in the previous corresponding period.

A marginal increase in revenue was offset by higher cost of sales and weaker contributions from the skincare and wellness retailer’s franchise business in China, it said on Monday (Nov 13).

Earnings per share stood at S$0.05, unchanged from the same period last year. 

Revenue in Q3 rose 4.2 per cent to S$104.5 million, largely from Best World’s direct selling segment but was offset by poorer performance in the China market due to ongoing macroeconomic challenges.

Cost of sales increased 31.8 per cent to S$21.9 million in Q3 due to higher packaging charges and overheads linked to the group’s Tuas manufacturing facility.

Distribution costs for the quarter held steady at S$36.7 million as a result of the slight increase in revenue when compared to the same period last year.

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Interest income for the quarter more than doubled to S$3.2 million from S$1.4 million due to higher interest derived from the group’s cash placed in structured and fixed deposits with banks. 

Looking ahead, Best World said its management maintains a cautious outlook for the next 12 months due to high interest rates, inflation and the economic performance of China which present strong headwinds for the group. 

“Management is of the opinion that the remaining months of 2023 will be challenging due to the Israel-Hamas conflict, which could threaten not only consumer confidence in the markets we operate in but potentially increase costs.”

No dividend was declared for the period.

Best World shares closed 1.2 per cent or S$0.02 lower at S$1.60 last Friday.