Japan Foods posts 94.5% higher 9M net profit of S$3.2 million on revenue growth

JAPAN Foods Holding recorded net profit of S$3.2 million for the first nine months of FY2023, up 94.5 per cent from S$1.7 million the previous year, on the back of higher revenue. 

The Catalist-listed restaurant chain operator on Friday (Feb 10) said revenue grew 54.1 per cent year on year to S$58.4 million from S$37.9 million. 

This was mainly attributed to positive responses to the group’s expanded Halal segment, and boosted further by the lifting of Covid-19-related restrictions. Japan Foods now has 21 restaurants that are Halal-certified and believes this will continue to be a growing segment for the group. 

Gross profit grew by 54.7 per cent to S$49.4 million from S$31.9 million previously, while gross profit margin rose slightly by 0.3 percentage point to 84.6 per cent. 

Overall expenses rose in line with revenue growth and increased business activities, with selling and distribution expenses up 26.9 per cent to S$41.7 million due to higher manpower costs, utilities and the depreciation of right-of-use assets.  

Other income fell by 89.6 per cent to S$0.7 million from S$6.6 million, in the absence of rental rebates as well as grants under the government’s Jobs Support Scheme. 

Japan Foods’ share of profit of its associated companies also fell by 54.3 per cent to S$139,000 from S$304,000 the previous year, mainly due to losses incurred by associated companies in China due to the country’s Covid restrictions. 

The response to the group’s recent commencement of operations at its store in Japan – which is franchised and operates through its joint venture with Minor Food Group – was not within its expectations, added the group.

Japan Foods said it expects the overall food and beverage industry as well as the group’s topline to reflect an increase in dine-in customers, amid Singapore’s normalisation post Covid-19. It, however, expects the operating environment to remain challenging in the near term due to intense competition, manpower shortages, an uncertain economic outlook and higher cost of operations. 

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“To cushion our bottom line against rising costs, we will intensify our efforts to manage our expenses and maintain our healthy balance sheet, while continuing to establish a compelling portfolio of brands, concepts and locations that appeal to customers,” the group said.

Shares of Japan Foods closed 2.3 per cent or S$0.01 lower at S$0.425 on Friday.