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BreadTalk Q3 profit drops 60% as expenses weigh on earnings
BREADTALK Group's third-quarter net profit fell 60 per cent to S$1.6 million under the weight of expenses.
On a per-share basis, earnings attributable to shareholders dropped to 0.56 Singapore cent for the three months ended September. For the nine-month period, net earnings decreased by 22.7 per cent to S$6.5 million, or 2.29 Singapore cents per share.
Revenue gained 4.7 per cent to S$161.7 million during the quarter, and gross profit was actually up by 7.7 per cent at S$87.2 million.
But distribution and selling expenses rose by 11.2 per cent to S$67.6 million, administrative expenses grew 12.8 per cent to S$18.9 million and taxes increased by 27.6 per cent to S$2.3 million to drag on profit.
The company said its bakery division is in the midst of tightening costs and operations, and plans to introduce a new concept store before the end of 2015. Its food atrium division has seen a slowdown in China, and profitability is expected to suffer with the opening of four new outlets during the year. The restaurant segment is still focused on growing the Din Tai Fung brand, but could reduce its exposure to the underperforming Ramen Play line.
Overall, BreadTalk is reviewing its expansion strategy given an expected slowdown in China, but expects to remain profitable for the rest of 2015.
BreadTalk shares closed at S$1.20 on Monday, higher by 0.8 per cent or one Singapore cent.