CATALIST-listed coffeeshop operator Kimly posted a 0.7 per cent rise in net profit to S$18.7 million for its first financial half ended Mar 31, from S$18.5 million the year before. 

But its revenue for the half year fell 0.9 per cent to S$155.5 million, from S$156.9 million a year earlier. 

Kimly, in its regulatory filing on Thursday (May 11), said a 5.7 per cent drop in revenue from its food retail division, which brought in S$91.2 million in the half year, contributed to the revenue drop.

The food retail division suffered from lower revenue contribution from existing food stalls or outlets due to a decrease in delivery sales, as demand has started to taper to a new normal since the relaxation of Covid-19 measures, it stated.

The division was also affected by the closure of Tenderfresh Group’s five restaurants and two stalls during the 2022 financial year – actions to rationalise manpower resources by redeploying this same pool of employees to newly-opened food stalls, it added.

These were, however, partially offset by higher revenue contribution from its outlet management division and outlet investment business division, the group said.

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Earnings per share stood at 1.5 Singapore cents for the first half, up from 1.49 cents the previous year.

An interim dividend of 0.56 Singapore cents per share was declared for the half to “express gratitude to shareholders for their unwavering support and continued loyalty”, Kimly said, adding that the group remains profitable despite a challenging economic environment. The dividend will be paid on or about Jul 14.

Kimly said the food and beverage industry will continue to face persistent challenges in the operating environment due to the escalation of input costs, including food ingredients and labour. 

“With the rising inflation, it will further exacerbate input cost, leading to lower margins,” it added.

The group also said the industry faces a manpower shortage, which further compounds these difficulties.

The introduction of a progressive wage model for workers in the food services industry adds to the pressure, as employees’ minimum wages have been raised, and they are set to receive annual pay increases over three years, it pointed out.

Shares of Kimly closed flat at S$0.34 on Thursday.