Senheng narrows Q2 loss as margins, cash flow improve

KUALA LUMPUR: In the second quarter ended June 30, 2026, Senheng New Retail Bhd's net loss shrank on a quarter-over-quarter basis. Improved margins and stricter cost controls helped offset weaker consumer spending. The consumer electronics retailer disclosed a net loss of RM1.6 million for Q2 FY26, down from RM1.3 million in Q1.

When accounting for a RM0.6 million tax incentive benefit recorded in Q1, the underlying net loss would have improved to around RM1.9 million in Q2, Senheng reported. However, revenue declined to RM236.7 million from RM270.4 million a year earlier, indicating selective consumer spending on higher-end electrical and electronics products.

Gross profit fell 5.6% year-on-year to RM53.6 million, but the gross profit margin improved to 22.7% from 21%. Operating and administrative expenses decreased to RM56 million, while finance costs dropped by 32.1% to RM900,000. For the six months, revenue amounted to RM487.5 million and gross profit reached RM107.4 million. Net cash generated from operations surged 48% to RM46.1 million, and cash and bank balances increased to RM103.9 million.

Managing Director Lim Kim Heng stated that Q2 demonstrated the company's commitment to building discipline within the business. The Point-Based Economy (PBE) marked Senheng's ninth transformation since 1989, highlighting that each phase demands investment and time to mature and scale. The group remains focused on creating a more productive customer ecosystem through PBE and S-Coin, emphasizing the importance of building a productive customer ecosystem rather than depending solely on short-term promotions or a price war.