Tung Lok in the black from government Covid reliefs and own cost control moves
TUNG Lok Restaurants (2000) has regained profitability, posting net earnings of about S$800,000 for the six months ended March 31, with government reliefs and its cost-control measures helping it reverse from a loss of S$1.2 million a year ago.
The restaurant group's business took a hit when the government banned meals during the Chinese New Year, traditionally a peak period for Tung Lok; companies were also barred from organising work-related events in restaurants.
This led to its top line falling by 6.9 per cent year on year to S$37.1 million for the second half of financial year FY2021.
Reliefs from the government and cost-reduction measures helped Tung Lok mitigate the impact from the pandemic-induced safe-distancing measures.
Similarly, the group's bottom line managed to post earnings for the full year with S$1 million, swinging from a net loss of S$2.6 million a year ago. But top line declined about 23.5 per cent year on year from S$78.1 million to S$59.7 million for the full year.
Efforts to control expenses and the financial support totalling about S$5 million from the state helped it to be profitable.
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The group reduced casual labour, cutting the number of workers on its payroll by nearly 200, and also temporarily lowered staff pay by as much as 30 per cent. These helped to cut administrative costs for the full year by about 22 per cent.
Having turned profitable, its earnings per share for the full year were 0.37 Singapore cent, compared with a loss per share of 0.94 cent a year ago.
Net asset value per share as at March 31 stood at 4.93 Singapore cents, versus 4.57 cents a year ago.
The group decided against a final dividend "so as to maintain sufficient liquidity to support our working capital requirements amid the uncertainties" during the pandemic, it said.
The group's shares closed flat at S$0.14 on Friday, before the Catalist-listed restaurant released its financial results.
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