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Marka narrows losses but problems continue

The company’s auditor points to uncertainty over retailer’s future

Gulf News

Dubai: Amid an ongoing restructuring, Dubai-listed retailer Marka has seen its losses narrow in the second quarter, while also seeing its revenue slip.

The company did manage, however, to post a gross profit of Dh9 million.

In a regulatory filing on the Dubai Financial Market, where it is listed, Marka said that its net loss for the three-month period ending June 30 was pared down to Dh11.9 million, as its operating expenses and cost of sales fell.

Cost of sales refers to the money required to make the products a company sells.

In comparison, Marka reported a net loss of Dh125.9 million for the same period in 2017, therefore reducing its losses by around 90 per cent.

The retailer’s revenue also dropped, from Dh25.4 million in the second quarter of 2017, to Dh19.9 million for the same period in 2018.

PricewaterhouseCoopers (PwC), the company’s auditor, expressed concern in the filing over Marka’s inability to continue to operate in light of the fact that its liabilities exceed its current assets.

Marka has also defaulted on certain bank borrowings, the auditor said.

“These events or conditions, along with other matters... indicate that a material uncertainty exists that may cast significant doubt on [Marka’s] ability to continue as a going concern,” their statement said.

It was not all bad news for the owner of Reem Al Bawadi, Morelli’s Gelato, and Harper’s Bazaar Café, however.

Marka reported a total operational profit of Dh2.8 million compared to a reported operational loss for the same period in 2017 of Dh48.6 million — the company’s second consecutive operationally profitable quarter.

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