KUALA LUMPUR (June 19): MyNews Holding Bhd narrowed its net loss to RM6.28 million for its second quarter ended April 30, 2023 (2QFY2023), from RM10.23 million in the same period last year, as revenue rose on contributions from new outlets.

Losses per share fell to 0.92 sen from 1.5 sen previously, according to the convenience store operator’s bourse filing on Monday (June 19).

Quarterly revenue climbed 23.46% to RM174.2 million from RM141 million, mainly due to the increase in the number of outlets and an improvement in overall in-store sales as business and social activities in the country normalised post-pandemic.

But in tandem with the increase in business volume and activities, MyNews' selling and distribution expenses grew 17.2% to RM35.48 million from RM30.26 million. Other expenses also grew 10.9% to RM19.56 million from RM17.65 million, mainly due to the increase in depreciation of right-of-use assets and depreciation of property, plant and equipment of RM2.91 million, which was partially offset by lower property, plant and equipment written-off, of RM1.01 million.

Finance costs, meanwhile, rose 21.8% to RM2.8 million from RM2.3 million, mainly due to higher interest expense on lease liabilities of RM1.73 million (from RM1.45 million).

For the cumulative six months ended April 30, MyNews halved its net loss to RM9.49 million from RM18.08 million in the same period a year earlier, as revenue grew 27.72% to RM358.29 million from RM 280.53 million.

Moving forward, MyNews said the growth rate in the number of new stores will be carefully managed against the current volatile economic environment.

The group operates 615 outlets in total, comprising 463 myNEWS stores, 133 CU Marts and 19 WHSmith outlets.

“We expect the sales performance to improve from quarter to quarter, driven by the growing store network and ongoing efforts in increasing the in-store sales through improving product mix and retail strategy. We expect the production volume of the Food Production Centre (FPC) to grow in tandem with the increasing retail revenue at the front-end," it said.

Meanwhile, it said the recovery of the air travel industry continues to boost the performance of WH Smith stores that are located in airports in the country.

“The management expects profitability in the short-term to remain challenging owing to the economic environment, increasing cost of business caused by inflation, and the young CU business that has yet to breakeven," it added.

In spite of the challenges, management remains confident and optimistic of the group's longer term prospects underpinned by its strong retail brands, and driven by internal talents that are relentless in improving and innovating the business, while being supported by essential infrastructure and technology that have been built over the years.

Shares in MyNews ended half a sen or 1.04% higher at 48.5 sen on Monday, giving the group a market capitalisation of RM330.84 million. The counter has fallen 23.02% since the beginning of the year.