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Sakae expects growth hit from Covid-19
SUSHI chain Sakae Holdings has published an update on how the Covid-19 outbreak is affecting its business, in reply to queries from the Singapore Exchange (SGX).
It said it expects consumer demand to remain weak, with reduced revenue for the period from April 1 to June 30 adversely impacting the group's financial performance.
Singapore has been in a partial lockdown since April 7 and since then, Sakae has operated only takeaway, on-line ordering and restaurant delivery businesses, with support from its central kitchen.
Dining-in at food-and-beverage outlets will still not be permitted for at least a few more weeks from June 1, Sakae noted: "The group will continue to monitor sales and developments closely and make adjustments accordingly."
Sakae has already moved to cut costs. It has temporarily halted the procurement of bulk ingredients, frozen headcount and salary increments and reduced casual staff.
To the SGX's query on how Covid-19 has affected Sakae's liquidity, the company replied that it is taking a prudent approach in managing its cash flow to conserve cash.
The group is applying for additional bank facilities in the form of a temporary bridging loan. Various forms of support from the government, including property tax rebates and the enhanced Jobs Support Scheme (including the waiver of foreign worker levy and deferment of income tax), will also provide some relief to the group.
Sakae expects growth to be curtailed for FY2020 ending on June 30, as well as for FY2021.
"The group expects further challenges within the food and beverage industry, given the lack of visibility on when consumer sentiment and demand will recover, and until such time that dining-in at restaurants is permitted," it said.
Sakae shares last changed hands at S$0.045 on May 26.