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Kimly reports 14.7% lower earnings of $18.5 mil for 1HFY2022; proposes interim dividend of 0.56 cents

Felicia Tan
Felicia Tan5/11/2022 9:13 PM GMT+08  • 3 min read
Kimly reports 14.7% lower earnings of $18.5 mil for 1HFY2022; proposes interim dividend of 0.56 cents
One of the Kimly coffeeshops. Photo: Albert Chua/The Edge Singapore
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Kimly has reported earnings of $18.5 million for the 1HFY2022 ended March, 14.7% lower than earnings of $21.7 million for the corresponding period the year before.

The lower earnings were due to a $3.0 million increase in administrative expenses of $12.5 million. This is due to repair and maintenance, bank charges, depreciation of property, plant and equipment, insurance, rental and general charges of $1.6 million incurred by the newly acquired Tenderfresh business. The higher depreciation of right-of-use assets, lower government grants, higher repair and maintenance charges, as well as higher depreciation of property, plant and equipment also contributed to the lower figure.

Earnings per share (EPS) stood at 1.49 cents, down from the 1.83 cents in the 1HFY2021 on a fully diluted basis.

Revenue for the 1HFY2022 increased by 27.9% y-o-y to $156.9 million. The higher revenue was mainly due to the higher food retail revenue and offset by the lower revenue for Kimly’s outlet management and outlet investment business segments.

The food retail division, which is the largest contributor to the group’s revenue recorded an increase of $36.8 million to $96.7 million, on the back of revenue contributions from the newly-acquired Tenderfresh business in October 2021.

See also: NeraTel revenue grows 22.4% y-o-y in 1Q22, mainly from government, telecom and utilities

The lower revenues from the outlet management division and outlet investment business division were due to the decrease in sale of beverages and tobacco products, arising from the lower footfall at most of the group’s coffeeshops.

In line with the revenue growth, cost of sales increased by 32.5% y-o-y to $109.1 million mainly driven by lower government grants, higher utilities charges which was in line with the rise in electricity tariffs and higher employee benefits.

As a result, gross profit increased by 18.5% y-o-y to $47.8 million.

Gross profit margin fell 2.5 percentage points y-o-y to 30.4%.

See also: Yongmao Holdings issues profit warning for 2HFY2022 ended March 31

EBITDA increased by 2.5% y-o-y to $49.0 million.

Net profit after tax fell by 7.6% y-o-y to $20.1 million.

The group generated $40.4 million in net cash from operating activities in the 1HFY2022 from the $46.6 million in the corresponding period the year before.

As at March 31, the group reported cash and cash equivalents of $65.2 million.

An interim dividend of 0.56 cents per share has been declared, which will be paid out on or around July 15.

Looking operating environment in the food and beverage (F&B) industry is expected to remain challenging as the local F&B players are facing mounting operating cost pressures brought by the ongoing manpower crunch.

Meanwhile, the group says it will continue to look for “suitable expansion opportunities” and to create “unique dining experiences” for different markets in Singapore following the opening of the second Kedai Kopi outlet and the third Tenderbest outlet.

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“We are heartened that our newly acquired business, Tenderfresh Group in October 2021 is performing well and started to make contribution to the group’s revenue. FY2021 was an eventful year. We believe that the corporate developments in FY2021 have laid a strong foundation for the group to grow as well as equip the group with more capabilities to better serve our customers,” say the directors of Kimly.

“Moving ahead, the group will stay focused in carrying out our four-pronged growth strategy to drive growth which include expanding footprint, diversifying product offering and revenue channels, expanding food retail division and strengthening operation capabilities to improve efficiency and productivity. As uncertainties persist, the group will keep a close watch on the Covid-19 situation and adjust our strategy accordingly to thrive in the ever-evolving landscape,” they add.

Shares in Kimly closed flat at 39 cents on May 11.

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