May 31, 2013 (LBO) – Odel Plc, a unit of Malaysia’s Parkson Retail Asia Limited, lost 16.3 million rupees in the March 2013 quarter, retreating from a 26.6 million rupee profit from a year earlier as it was hit by a new value added tax on retailing. The firm reported losses of 9 cents per share in accounts filed with the Colombo Stock Exchange. In the year to March it reported earnings of 88 cents per share on revenues on total profits of 157 million rupees.
In the March quarter revenues rose 1.9 percent to 984 million rupees but cost of sales rose 10.9 percent to 655 million rupees, shrinking gross profits 12 percent to 329 million rupees.
As the government extended value added tax to large retailers the company’s margins were hit and the full impact could not be passed to customers the company said. There was also no input credit on stocks already bought.
Though the firm earned 78 million rupees in interest income from unspent proceeds of a rights issue, there were higher administration costs and a changeover to international accounting standards also reduced profits, the company said.
After the rights issue Parkson Retail Asia owns 47 percent of the firm. The company intends to expand retail space.