Dear Valued Shareholders,
On behalf of the Board of Directors, I am pleased to present to you the annual report for Polaris Ltd (the “Company”, and together with its subsidiaries, the “Group”) for the financial year ended 31 December 2023 (“FY2023”).
DEVELOPMENTS IN FY2023
In 2023, the Singapore economy exhibited moderate growth, expanding by 1.2% compared to the previous year’s robust 3.8%. Despite facing economic challenges, the Group’s preowned luxury goods business in Asia showcased resilience, with an uptick in top-line growth. Nevertheless, the Group’s overall revenue for 2023 was impacted by its other business segments as a result of a dampening economic growth outlook and diminished consumer confidence, leading to a decline in the Group’s revenue compared to the previous year.
Following the unexpected resignation of the Group’s pre-loved US business partner in early 2023, the Company spent the year expending significant resources to address numerous issues which arose subsequently. This included a restatement of its FY2022 accounts for the Group, as it was confirmed pursuant to US legal opinion, that the Group’s shareholding interest in the US entity Marque Luxury America, LLC (“MLA”) had been deemed to be substantially diluted as of 28 February 2022.
In Asia, our pre-loved luxury goods business continued to grow and build positive momentum in 2023 through Mastro Luxe Pte.Ltd. and its operations in Indonesia, Korea, the Philippines and Singapore. This growth was fuelled by the Group’s expanding retail sourcing network.
While the consumer electronics segment saw a decrease in the top line, its bottom line improved by achieving several targets set by a manufacturer, as well as having a first full year without our underperforming retail store that was closed in 2022. The focus is now on corporate sales and government tenders. Following changes in the business plans of a critical partner in late 2022, the customer services business segment experienced a significant decline in revenue.
FINANCIAL REVIEW
For FY2023, the Group recorded revenue of S$22.1 million, representing a decrease of 19% against the revenue of the previous financial year ended 31 December 2022 (“FY2022”) of S$27.3 million.
This decrease was due to reduced turnover from consumer electronics sales and customer services. The pre-loved luxury goods segment saw an increase in turnover by 26% from S$7.1 million in FY2022 to S$8.9 million in FY2023. The turnover from
the customer services segment decreased by 75% from S$2.8 million in FY2022 to S$0.7 million in FY2023. As explained above, this significant drop resulted from changes in business plans and agreements with a key partner in late 2022. The turnover from consumer electronics sales decreased by 28% from S$17.3 million in FY2022 to S$12.4 million in FY2023.
The Group recorded a net loss of S$2.3 million in FY2023, compared to the S$5.1 million net loss in FY2022. This decrease in loss can most significantly be attributed to reduced other expenses. These expenses were higher in 2022 due to the fair value loss on investment in MLA. Additionally, the consumer electronics segment returned to profitability, while the customer services segment experienced decreased profitability during the same period.
The Group did not take out any new loans in FY2023. Cash and bank balances decreased from S$6.2 million as at 31 December 2022 to S$2.4 million as at 31 December 2023 primarily due to losses, increase in receivable and intangible asset, loan borrowing repayment and purchase of property, plant and equipment.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
As responsible corporate citizens, we have assessed environmental, social, and governance matters relevant to our Group. Our aim is to ensure that our business practices align with our sustainability objectives and contribute positively to both
the planet and our communities. In this year’s sustainability report, we have expanded our coverage to align with our growing ESG efforts.
Looking ahead, we remain steadfast in our commitment to fortify our sustainability goals. We intend to integrate the principles outlined by the Task Force on Climate-related Financial Disclosures (“TCFD”) into our business operations and reporting. We earnestly seek the support of our employees, shareholders, and business partners as we collectively strive for a more sustainable future.
LOOKING AHEAD
The Group remains committed to its course of action, which involves cultivating and pursuing businesses that are related to sustainability and the circular economy. Additionally, the Group aims to facilitate the transition of existing industries
towards sustainability. Presently, our pre-loved luxury goods re-commerce business and our customer services repair and refurbishment business form the cornerstone of
these endeavours. In 2023, our activities that align with the aforementioned objectives in Indonesia took shape and grew.
The worldwide market for pre-owned luxury goods, within which the Company’s re-commerce business operates, is anticipated to remain resilient. Our Asian operations have ambitious growth strategies for 2024, with a particular focus on expanding our
sourcing retail presence.
Post a demanding 2023, in response to shifts in the business plans of a critical partner, the customer service sector regained stability in early 2024. The prospects for the upcoming reporting period remain consistent.
The consumer electronics segment remains committed to its strategy of targeting corporate sales and government tenders, which successfully restored profitability. We aim to sustain this upward trajectory in 2024 with a well-defined strategy and efficient operations. Our brand partners and their impressive product portfolios remain invaluable assets for us.
Amidst the trials and tribulations encountered from 2022 through 2023, our outlook remains cautiously optimistic. We are actively searching for prospects in developing sectors, such as the circular economy and Indonesia, and striving to improve
operational efficiency whenever possible. Our consolidated office operations in Singapore continue to yield cost savings and a reduction of our environmental footprint. Our strategic focus lies in maintaining a balance between our established ventures and promising high-growth prospects, all with the ultimate goal
of optimising shareholder value.
WORDS OF APPRECIATION
We extend heartfelt gratitude to past and outgoing directors Ms. Serena Wong and Mr. Masahiko Yabuki for their invaluable contributions and guidance and extend a warm welcome to new directors Mr. Chong Eng Wee and Mr. Tay Boon Zhuan. We are excited to have them join us and look forward to benefiting from their expertise and fresh perspectives. We further extend our deep appreciation to all directors and our staff for their hard work and commitment. Furthermore, we would like to extend our sincere thanks to our shareholders, business partners, customers, and service professionals for their support. Together, we will forge a sustainable future.
Sugiono Wiyono Sugialam
Executive Director and Chairman
Soennerstedt Carl Johan Pontus
Executive Director and Chief Executive Officer
