Dividend skipped as Sa Sa falls $515m in the red

Sa Sa International (0178) recorded a net loss of HK$515.9 million for the year ended March, compared to a profit of HK$470.8 million a year ago, with earnings dragged down by political unrest and the Covid-19 pandemic.

For the first time, the cosmetic chain did not declare a final dividend due to "the challenging and uncertain operational environment in the operating markets."

Retail sales in Hong Kong and Macau slumped 75.9 percent year-on-year from April to June 14.

Sa Sa incurred a loss of HK$413.6 million in Hong Kong and Macau for the year ended March, compared to a profit of HK$512.2 million in the same period last year. Retail and wholesale sales for the period fell 33.2 percent to HK$4.74 billion.

Sa Sa has 112 stores in Hong Kong and Macau as of the end of March, down 6 from a year ago. The company closed all its retail stores in Singapore in December 2019, and its total number of retail stores fell to 235.

The group will endeavor to ask landlords for substantial rent cuts or change their tenancies from fixed rent to commission-based upon renewal. The company also said it requires at least 60 percent discount to cover rental costs, and that it expects more than 10 stores in Hong Kong and Macau will have to close.

From April 1 to last Sunday, the turnover of retail sales and wholesalers plunged 69.5 percent year-on-year. China retail sales fell 15.3 percent, and e-commerce sales fell 22.7 percent.

The group said it will focus on developing online sales through social e-commerce, such as WeChat Mini Programs.