Japan Foods H2 profit falls 63% to S$1.8 million on higher costs
JAPAN Foods Holding posted a 63.3 per cent drop in net profit to S$1.8 million for its second half ended Mar 31, 2023, from S$4.9 million in the previous corresponding period.
This is even while revenue for the second half rose 21.4 per cent to S$40.6 million, from S$33.4 million a year earlier, the Catalist-listed company, which operates restaurants such as Ajisen Ramen and Tokyo Shokudo, said in a regulatory filing on Tuesday (May 23).
The group’s selling and distribution expenses were up 28.8 per cent to S$30.1 million, from S$23.4 million previously, mainly due to higher manpower costs, utilities and depreciation of right-of-use assets, as well as plant and equipment.
Earnings per share stood at 1.03 Singapore cents for the half year, down from 2.79 cents the previous year.
A final dividend of one Singapore cent per share was proposed for the year, down from 1.35 cents the year before, for shareholders’ approval at the upcoming annual general meeting. The date payable will be announced later.
For the full year ended Mar 31, net profit was up 27.7 per cent at S$4.1 million, while revenue jumped 43.8 per cent to S$78.5 million.
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The restaurant chain operator attributed the improved performance to the “strong momentum” of its Halal segment, the addition of several new brands to its portfolio, as well as increased sales revenue across all its brands.
“We are very encouraged at how quickly our revenue bounced back from the pandemic era to hit a new record,” said Takahashi Kenichi, executive chairman and chief executive.
“It affirmed our strategy to enter the Halal segment and also demonstrated the resilience of our business against Singapore’s highly competitive food and beverage landscape.”
While the group is optimistic that its performance will continue to reflect the post-pandemic recovery, it expects inflationary pressures to weigh on cost of operations and raw materials. Fears of a recession may also impact consumer spending, the group noted, while also expecting the F&B industry’s manpower crunch to persist.
“To mitigate these challenges, the group will intensify efforts to manage its expenses and maintain a healthy balance sheet,” said the group. Japan Foods will also continue to develop new brands within its Halal segment, which has yielded positive results for the company.
Shares of Japan Foods closed flat at S$0.435 on Tuesday, before the results were announced.
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