BreadTalk Q4 profit drops 91.7% to S$1.1m on accounting change, flat sales

BREADTALK Group's fourth-quarter net profit dropped 91.7 per cent to S$1.1 million, or 0.41 Singapore cent per share, as the company began to use fair-value accounting for its investment properties.

For the full 2015, net profit fell 65.7 per cent to S$7.6 million, or 2.7 Singapore cents per share. The restaurant operator and bread retailer declared a final dividend of one Singapore cent per share, on par with its year-ago payout.

Revenue was flat during the quarter, increasing by 0.2 per cent to S$155.1 million. Gross profit slipped 1.3 per cent to S$81.4 million as cost of sales increased by 1.9 per cent, but lower distribution, selling and administrative expenses helped operating profit before tax to increase by 20.9 per cent to S$10.5 million.

The company began to carry its investment properties on a fair value model during the 2015 financial year, instead of using cost. As a result of the change, profit after tax for full-year 2014 increased by S$10.0 million after restatement.

Beyond the accounting change, BreadTalk also included a goodwill impairment of S$1.0 million for its Beijing Food Atrium business in 2015, and recorded an asset impairment and write-off of S$4.4 million on certain underperforming outlets and outlets that closed during the year.

The company expects to remain profitable in 2016.