SINGAPORE (Aug 4): Restaurant operator Japan Foods Holding posts earnings of $1.30 million in 1Q17 ended 30 June 2016, a 24.1% increase from $1.05 million reported in the same quarter last year.

Revenue grew 6.4% to $16.8 million in 1Q17, up from $15.8 million last year.

This is mainly attributed to higher revenue generated from an increased number of stores as well as gross profit margin which rose by 1 percentage point from 83.5% to 84.5%, Japan Foods says in a statement.

Japan Foods’ number of stores in 1Q17 increased to 50, comprising 49 restaurants and one food court outlet, up from 48 stores last year.

The Group’s flagship brand and main revenue generator ‘Ajisen Ramen’ recorded a decrease in revenue to $6.3 million in the quarter, from $7.2 million last year.

This was due to the closure of two restaurants located at Compass Point and Tiong Bahru Plaza in September 2015 and December 2015 respectively due to mall renovation works.

The Group’s overseas network reduced to 19 restaurants in 1Q17, from 24 restaurants in 1Q16.

This was due to the cessation of three ‘Ajisen Ramen’ brand restaurants in Malaysia and Vietnam.

In Hong Kong, the Group also has two less ‘Menya Musashi’ brand restaurants as compared to 1Q16 due to the expiration of lease.

Japan Foods saw three new restaurant brands contribute to its 1Q17 revenue compared to last year, with the addition of one ‘Dutch Baby Café’ store, one ‘Ginza Kushi Katsu’ store, and three ‘New ManLee Bak Kut Teh’ stores.

“It is imperative that we continue to innovate and launch new concepts and brands and also to regularly update our existing restaurants so that we can continue to attract new customers and retain loyal ones,” says Takahashi Kenichi, Executive Chairman and CEO of Japan Foods.

“The response to our new brands has been very heartening. Our first non-Japanese concept ‘New ManLee Bak Kut Teh’ has been particularly well-received,” he adds.

Looking forward, Japan Foods says the new financial year is “expected to remain challenging for the local F&B scene due to intense competition, tight labour supply, rising business costs and uncertain economic outlook”.

Japan Foods closed at 35 cents on Tuesday.