Japan Foods’ Q1 net profit falls 84.5% to S$211,000 amid higher expenses
Michelle Zhu
JAPAN Foods reported net profit of S$211,000 for the first quarter ended June, representing an 84.5 per cent decline from S$1.4 million in the corresponding period in the year before.
The weaker bottom line came despite higher revenue, which grew 13 per cent to S$21.3 million from S$18.8 million the previous year, as a result of the group’s expanded halal offerings as well as an increased number of operating restaurants.
Gross profit margin was down by half a percentage point to 84.3 per cent for the first quarter, the group said in a business update on Friday (Aug 11).
Selling and distribution expenses widened to S$16.3 million from S$13 million the year before.
The group attributed this to higher manpower costs, utilities expenses and depreciation charges of right-of-use assets.
While Japan Foods noted significantly higher footfall at shopping malls and an overall improvement in consumer sentiment, it expects the next 12 months to remain challenging in view of economic and industry headwinds.
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It listed “intense competition, a manpower crunch and the rising cost of operations due to inflationary pressures” as factors among prevailing conditions faced by the food and beverage industry.
To mitigate these challenges, the group said it will work harder at managing expenses and maintaining a healthy balance sheet, while continuing to explore new brands and locations to drive its topline growth.
Japan Foods operates restaurants including Ajisen Ramen and Tokyo Shokudo.
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The shares of Japan Foods were trading flat at S$0.43 as at 9.23 am on Friday, after the news.
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