Japan Foods Holdings has reported net profit of $1.4 million for the 1QFY2023 ended June, reversing from the net loss of $1.2 million in the same period the year before.
The Catalist-listed group operates a chain of restaurants in Singapore, which includes Ajisen Ramen, Kazokutei, New ManLee Bak Kut Teh and Tokyo Shokudo.
During the 1QFY2023, the group saw revenue spike by 91.8% y-o-y to $18.8 million thanks to the group’s expanded halal segment. Revenue was also further boosted by the lifting of the Covid-19-related capacity limits and restrictions on social gatherings.
Gross profit for the quarter increased by 93.6% y-o-y to $15.9 million in line with the higher revenue.
1QFY2023’s gross profit margin (GPM) rose by 0.8 percentage points y-o-y to 84.8%.
During the quarter, the group saw other income – which comprises mainly the royalty income, wage credit grant, small business grant and the late release of rental rebates from some landlords -- decline by 87.5% y-o-y to $265,000. The lower sum was due to the discontinuance of rental rebates from landlords and grants under the Singapore government’s jobs support scheme (JSS).
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In the 1QFY2023, the group recorded a share of loss of associated companies of $84,000, compared to the $125,000 share of profit of associated companies. The quarter’s loss was due to the losses incurred by the group’s associated companies in China on the back of its strict zero-Covid-19 stance during the period.
In its outlook statement, Japan Foods Holdings says it expects the next 12 months to remain “challenging” due to the manpower crunch in Singapore’s food and beverage (F&B) industry and higher cost of operations.
The manpower crunch was due to the high demand and competition for service staff that has intensified since the lifting of Covid-19 related restrictions on dining-in and social gatherings since April. The higher cost of operations stem from inflationary pressures and an uncertain economic outlook.
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That said, it expects the F&B industry and its topline to reflect an increase in its dine-in customers.
“To cushion our bottom-line against rising costs, we will intensify our efforts to manage our expenses and maintain our healthy balance sheet, while continuing to establish a compelling portfolio of brands, concepts and locations that appeal to customers,” says the group in its statement on July 21.
In addition, the group says its newly-introduced halal segment will continue to be a growing segment following the positive response it received.
It is also working towards the opening of its first Thai concept restaurant in Tokyo in August.
As at June 30, the group has a total of 59 outlets across its brands. During the same period, its associated companies have eight restaurants each in Hong Kong and China and one restaurant in Indonesia under the Menya Musashi brand. Its associate company also operates four restaurants in Hong Kong and one restaurant in Shanghai, China under the Konjiki Hototogisu brand as at June 30.
Shares in Japan Foods closed flat at 42 cents on July 20.