BreadTalk posts higher Q3 profit lifted by associates, joint ventures

BREADTALK Group on Wednesday posted earnings for the third quarter that doubled from the same period a year ago, lifted by share of results from associates and joint ventures.

Net profit for Q3 2016 rose to S$3.3 million, from S$1.6 million in Q3 2015.

This, as share of result from associates came in at S$131,000 for the quarter from a loss of S$637,000 in the year-ago period.

Share of result from joint ventures soared to S$429,000 from S$63,000 the previous year.

Earnings per share were up to 1.16 Singapore cents from 0.56 Singapore cent.

Revenue dipped 2.7 per cent to S$157.3 million in Q3 2016, dragged down by weaker performance in the food atrium business.

For the first nine months of the year, net profit grew 8.5 per cent to S$7 million, while revenue dipped 1.6 per cent to S$461.7 million year on year.

In its outlook, the group said it has embarked on a consolidation path in its business, especially in China, in view of a still challenging food and beverage retail environment in that market.

"With its efforts in tightening cost controls and improving its supply chain operations having borne fruits, the bakery division has also commenced the review of its existing franchise portfolio with the aim to consolidate its operations and position the franchise business for future expansion," it said.

The under-performance of the food atrium division has largely come under control, with a clear turnaround plan in place, the group said, adding that new outlet openings in the next 12 months will largely be focused on key cities "where we have existing strong operating track record".

Capital expenditures on such outlets will be more stringently controlled to shorten the payback period, it added.

As for the restaurant division, it continues to have a steady performance and the group will explore new opportunities for growth both in existing and new markets.