Japan Foods expects steady revenue but lower earnings for FY2020 due to Covid-19

JAPAN Foods on Wednesday said that, based on a preliminary review of its unaudited management accounts, it expects full-year revenue in FY2020 to be comparable to a year ago, but that its net profit after tax will be lower than that in FY2019.

The owner of several Japanese food and beverage brands here (such as Ajisen Ramen) is still in the process of finalising the group's FY2020 unaudited consolidated financial statements. The numbers will be disclosed by end-July.

The company also gave operational updates, saying that in April, it had maintained a skeletal operational model; only up to 13 of its restaurants in the malls in residential areas were kept open at various points for takeaways and deliveries, with support from the group's central kitchen and headquarters.

When the circuit breaker was extended to June 1, the group progressively resumed the operations of more outlets to sustain manpower expenses and other overheads. As at Wednesday, 30 of the Group's 59 restaurants had resumed providing takeaways and deliveries.

Although the circuit-breaker measures will end in about a week, dining in at food and beverage outlets will still not be permitted for at least a few more weeks. The group will monitor sales and developments and may adjust the number of restaurants kept open from time to time as the Covid-19 situation evolves, it said.

Meanwhile, Japan Foods has intensified its efforts to control costs and intends to keep its operations in Singapore lean. It will be prudent in managing its restaurant portfolio in Singapore and overseas, and negotiate the best possible terms when renewing leases or entering into new ones, it said. 

It said that the Covid-19 measures are expected to adversely impact the group's financial performance, especially in terms of reduced revenue in April and May, and until dining in at restaurants is allowed and demand picks up again.  

The group added that the government's Job Support Scheme and landlords' rental relief will cushion the fall in its revenue, although the group's growth prospects for the remaining FY2021 will be curtailed.