Best World's profits climbed 79% to $10.33m in Q1

Earnings were bolstered by strong demand for its DR’ Secret skincare line in China.

Personal care firm Best World began 2019 on a high note after profits soared 79% YoY to $10.33m in Q1 from $5.77m in 2018, an announcement revealed. Revenue also skyrocketed 117.4% YoY from $24.55m to $53.36m.

Its strong performance was attributed to sales growth in most of the group’s markets, as well as improvements in the direct selling segment and the recognition of revenue from the franchise segment. The full contribution from the franchise segment during the quarter resulted in an improvement of gross profit margin to 75.2%.

Across Best World’s markets, China’s outperformance was the most pronounced, due to strong underlying demand for the group’s skincare line of DR’s Secret as well as full adoption of the new franchise model.

“Notwithstanding this, revenue from China could have been better if not for delays experienced for two stock keeping units (SKUs) of DR’s Secret and the re-registration of new formula of existing products,” the firm highlighted.

Best World added that revenue from the sale of the two SKUs will be recognised only in Q2 2019 to early Q3 2019, when the delivery of the products is complete. That said, the group does not expect additional licenses to be re-registered for the remaining periods of FY 2019.

Meanwhile, revenue from Singapore increased from $1.7m in Q1 2018 to $2.2m in 2019 mainly due to the increased level of activity from distributors as a result of promotions and campaigns, and improved response by existing consumer members to Best World’s weekly marketing activities, the firm highlighted.

Barring any unforeseen circumstances, Best World is cautiously optimistic of its ability to achieve growth in both revenue and profit for the group when compared to FY 2018, mainly due to positive demand arising from China, Taiwan, Indonesia and Singapore.

That said, the firm noted that higher administrative expenses due to an increase in management and staff in its headquarters, and expenses in the construction of its Tuas manufacturing facilities and refurbishments of regional centres may affect its earnings going forward.