Japan Foods' Q1 earnings rise 28.8%

JAPAN Foods Holding on Tuesday reported a 28.8 per cent increase in first-quarter FY2016 net profit to S$1.1 million, on the back of higher revenue.

Revenue for the three months ended June 30, 2015, was 0.8 per cent higher at S$15.8 million, lifted by an increase in the number of stores.

Earnings per share were up 27.7 per cent to 0.6 cent.

The group's flagship brand and main revenue generator, Ajisen Ramen, recorded a net decrease in revenue of S$0.2 million to S$6.7 million in Q1 due to the closure of two restaurants located at Parkway Parade and Jurong Point Shopping Centre upon expiry of their leases.

Despite this, the decrease in sales was partially offset by an increase in revenue generated by other existing restaurants, said the group.

It added that its overseas network has expanded substantially, from 19 restaurants in Q1 FY2015 to 24 restaurants in this quarter. "The growth was driven by the group's associated companies opening of restaurants under the "Menya Musashi" brand in Hong Kong and various cities in China."

Japan Foods said it expects the operating environment in the local food and beverage scene to remain challenging due to tight labour supply, stiff competition as well as rising labour and rental costs.

"Besides ongoing efforts to control raw material costs, improve operational efficiency, practise good restaurant portfolio management as well as closely monitor market demands and the performance of individual restaurants, the group will also seek opportunities to expand its presence in the Asean region by way of joint ventures, acquisitions and/or sub-franchising of its brands," it said.

Having crossed the S$75 million mark in its market capitalisation, the group said it is now required to report its performance quarterly starting from the first quarter of 2016.