SINGAPORE (Nov 5): BreadTalk Group posted earnings of $2.1 million for the 3Q ended Sept, 41.7% lower compared to its earnings of $3.7 million a year ago on the back of higher expenses. 

The lower y-o-y profit was mainly attributed to one-off costs associated with the group’s opening of its Din Tai Fung business in London and other businesses, as well as certain underperforming segments of the Bakery Division which is in the process of undergoing restructuring.

Revenue for the quarter nonetheless grew to $157.7 million, up 2.3% on-year from revenue of $154.1 million in 3Q17.

The overall improvement in quarterly revenue was led by growth from the the Food Atrium and Restaurant Divisions as well as contributions from its newest division, 4oth Food Concepts, offset in part by lower revenue from the Bakery Division.

Distribution and selling expenses for 3Q grew 4.7% to $62.1 million from $59.2 million a year ago.

Interest expense doubled to $2.4 million from $1.1 million the previous year amid a rising interest rate environment.   

Meanwhile, administrative expenses widened by 34.1% to $28.6 million from $21.4 million previously.

For 9M18, earnings were down more than half to $6.1 million as compared to 9M17 earnings of $15.4 million in the absence the previous year’s divestment gain from BreadTalk’s divestment of its interest in TripleOne Somerset.

Excluding the divestment gain, core net profit for 9M18 would have been 5.2% higher y-o-y.

Henry Chu, CEO of BreadTalk, says the group continues to build its pipeline for future growth as it enters into strategic joint ventures for its F&B businesses, as well as invests in its support infrastructure.

Commenting on the group’s revenue growth booked for 3Q, Chu says: “This bears testament to our long term strategies of ‘Consolidate Current, Grow New’, which will bear fruit in time to come. My team will continue to stay focused and work hard to deliver the value to our shareholders.”

Shares in BreadTalk closed 2.6% lower at 92 cents on Monday.