Koufu saw a large chunk of its 1H20 earnings bitten off due to the impact of the Covid-19 outbreak. Earnings came in at $2.5 million, some 82.0% lower than $14.1 million recorded in 1H19.

This was while revenue dipped by 23.2% to $89.0 million from $115.9 million a year ago.

Revenue contribution from the outlet and mall management segment decreased by 19.4% y-o-y to $47.8 million, mainly due to decrease in fixed rental income as the group passed on rental and property tax rebates granted by landlords to stall tenants; decrease in variable rent income owing to lower footfalls at most of the outlets especially during the circuit breaker and Phase 1 of the re-opening of the economy as dine-in services were disallowed; and decrease in the recovery of cleaning expenses from stall tenants as lower cleaning expenses were incurred during the circuit breaker and Phase 1 periods when dine-in services were disallowed.

Revenue from the food & beverage retail business segment decreased by 41.2% y-o-y to $41.2 million, largely contributed by lower footfalls at most of the outlets especially during the circuit breaker and Phase 1 periods as dine-in services were disallowed and the temporary suspension of operations of 10 food courts, three quick-service restaurants (QSR), two full-service restaurants and 26 R&B tea kiosks/QSR during the circuit breaker and Phase 1 periods.

Other income saw a significant increase to $7.1 million from $3.4 million last year, mainly due to increase in government grants.

Although Koufu managed to cut total expenses by 9.3% y-o-y, it was not enough to offset the drop in revenue.

As at end-June, cash and cash equivalents stood at $76.4 million.

Koufu’s board has also proposed an interim dividend of 0.5 cent per share, payable on Sept 3. This is 50% lower than the 1.0 cent dividend declared in the same period last year.

Despite the tough operating environment, Koufu’s executive chairman and CEO Pang Lim remains positive on the group’s outlook and expects to remain profitable in the next 12 months.

“We have built up a defensive and resilient business model that has been tried-and-tested through time, including previous economic recessions of SARS in 2002 and the global financial crisis of 2007-2008. Our business model has enabled us to remain cashgenerative and robust through economic cycles,” says Pang.

“We are constantly assessing Koufu’s business strategy and growth trajectory to tide over any crises and economic downtrends, as well as to clinch opportunities when it arises. We have been focused on investing in new areas, leveraging on our strong fundamentals and proven business model, to ensure Koufu’s long-term sustainable growth,” he adds.

Shares in Koufu closed 2.16% lower at 68 cents on Aug 11.