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Sakae posts S$6.1m Q3 loss after S$3.2m impairment charge for Chilean acquisition

SAKAE Holdings reported on Wednesday night a S$6.1 million loss for its third quarter from a S$306,000 profit for the year-ago period, after recognising a S$3.2 million goodwill impairment charge for its majority stake in a Chilean seafood trader.

It is the second consecutive quarter that the sushi restaurant operator is seeing red amid intense competition within the food and beverage industry. The group expects operating conditions to be challenging as food, labour, rental and utilities costs will likely continue to rise in the next 12 months.

Loss per share was 4.36 Singapore cents versus earnings per share of 0.22 cent. Sakae's shares closed flat at S$0.135 on Wednesday.

No dividend was declared, same as the year before.

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Revenue for the three months to March 31, decreased 0.8 per cent to S$12.2 million from S$12.3 million due to streamlining of outlets and slow sales overseas.

Other operating expenses nearly tripled to S$9.3 million from S$3.2 million, due mainly to a goodwill impairment of S$3.2 million and an impairment loss on other receivable of S$2.8 million.

The goodwill charge was for Sakae's 51 per cent-owned Chilean frozen seafood production and trading company, Cocosa Export. It acquired the stake on March 6, 2016, and Sakae said on Wednesday the value of its investment in Cocosa Export may not be recoverable.

Despite the allowance for impairment loss on other receivables, the group said it will continue to work on its recovery.