BreadTalk Q2 earnings fall 58% on bakery woes
Singapore
AS rapper Nicki Minaj's Anaconda goes, BreadTalk Group results don't want none unless they got buns.
The mainboard-listed food and beverage operator, best known for the eponymous bakery chain, posted on Thursday a second-quarter plunge in net profit amid mounting costs.
Earnings were more than halved, falling 57.9 per cent year on year to S$1.02 million for the three months to June 30, even as revenue grew by 9.8 per cent to S$163.3 million.
The bottom-line hit came from a surge in distribution and selling expenses, which rose by 40.4 per cent to S$85.6 million for the period.
BreadTalk, which has more than 990 outlets worldwide, grew store count for directly operated bakeries and restaurants, as well as "4orth" food concepts, in the first half. But the expansion may have eaten into receipts.
Net profit fell by 35.3 per cent to S$2.34 million for the half-year, even as revenue grew by 7.9 per cent to S$321 million. The flagship bakery division sank into the red, despite turnover from consolidated ownership of its Thailand operations.
Meanwhile, BreadTalk's restaurant business saw its pre-tax profits down by 12.6 per cent year on year, as operations in Britain were not yet profitable, while 4orth posted a pre-tax loss that was attributed largely to the start-up costs for new outlets.
Still, the group said in its outlook statement that it will focus resources on expansion in key markets, alongside plans to open its first Song Fa Bak Kut Teh outlet in Taiwan by year-end.
"Efforts to turn around the bakery business, particularly in China and Thailand remain under way, while we continue to build on the strong performance of the business in Singapore."
The board recommended an unchanged interim dividend of half a Singapore cent. BreadTalk shares added S$0.015, or 2.14 per cent, to S$0.715, before the results were out.
