Sa Sa International (0178) narrowed its net loss by 25 percent to HK$181 million for the six months ended September, with no interim dividend declared.

The cosmetics retailer said the challenging business and operating environment contributed to the decision of no interim dividend payout. The basic loss per share amounted to HK$5.9.

The company's continuing operations turnover climbed by 24.2 percent to HK$1.59 billion over the same period last year, while retail and wholesale turnover in Hong Kong and Macau surged by 26.9 percent to HK$1.08 billion.

Simon Kwok Siu-ming, Sa Sa chairman and chief executive, struck a more conservative attitude toward reopening the border with mainland China. He predicted that the company will not make a profit next year, but will have higher turnover in December and January next year.

The company had 233 stores as of September 30, 15 fewer compared to the same period last year. Ten of the closed stores were located in tourist districts in Hong Kong.

However, the store closures resulted in no noticeable loss of sales, as some physical store customers turned to shop online. Online business sales in Hong Kong grew 41.1 percent year-on-year to HK$58.4 million.

Kowk said five to eight retail stores are expected to be closed, especially those with excessively high rental costs or low contributions.

The company expects a net decrease of 15 to 18 in the total number of stores by March next year.

As for the mainland China market, Sa Sa will reduce the number of new stores opened to 80 in this fiscal year, a 20 percent decrease from its previous plan, which underestimated the impact of the pandemic.

Kwok admitted the retailer had wrongly judged that the epidemic had passed in the mainland at the beginning of the year and expanded the business and opened new stores in the mainland, which led to the widening of the loss in the first half of the year.

Sa Sa underestimated the impact of the pandemic. SING TAO

No payout as Sa Sa narrows loss to $181m