Jumbo Q3 net profit drops 24.8% to S$1.7m on higher expenses

SEAFOOD restaurant operator Jumbo Group saw third-quarter net profit decline 24.8 per cent on year to S$1.7 million, as revenue inched up and expenses rose.

Revenue rose 0.8 per cent year-on-year to S$36.4 million for the third quarter as Jumbo opened three new restaurants in Singapore, Jumbo Seafood at Jewel Changi Airport, Zui Yu Xuan Teochew Cuisine and Chao Ting Teochew Pao Fan at Far East Square. However, revenue was affected by the Jumbo Seafood restaurant at The Riverwalk, which was closed for one month for renovations.

Expenses also increased largely due to the opening of the new restaurants. Employee benefits rose 1.1 per cent to S$11.5 million, operating lease expenses went up 4.3 per cent to S$3.6 million, while utilities increased 10.8 per cent to S$1 million. 

Earnings per share for the third quarter stood at 0.3 Singapore cent, unchanged from a year ago. 

In its results announcement on Tuesday, Jumbo said it expects to continue facing headwinds such as operating cost pressures and keen competition. The Singapore operations are expected to continue to form "the bedrock of earnings growth", with the new restaurants expected to help Jumbo strengthen its foothold in the local market. 

For the first nine months, Jumbo recorded net profit of S$9.1 million, up 6.2 per cent year-on-year. Revenue, however, edged down 0.4 per cent to S$113.1 million. 

Earnings per share for the period was 1.4 Singapore cents, up slightly from 1.3 cents the previous year.