SINGAPORE (Aug 2): BreadTalk saw 1H17 earnings more than treble to $12.8 million from $3.8 million a year ago on better margins.
In 1H17, total group revenue declined 3% to $295.2 million from a year ago.
The Bakery Division saw revenue fall 3.2% to $145.9 million. This was primarily attributed to weaker direct operated stores performance in Shanghai and Beijing.
Due to the closure of underperforming stores in China, revenue at the Food Atrium devision declined 8.1% to $73.7 million from $80.2 million as the number of outlets decreased to 56 to 1H17 from 61 in 1H16.
Despite the challenging retail landscape, revenue increased 3.0% from $73.5 million in 1H16 to $75.7 million in 1H17 at the Restaurant Division. This upward trend was driven primarily by the stellar performance of Din Tai Fung restaurants in Singapore and Thailand, and supported by the declining losses of RamenPlay.
In 1H17, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose 16.1% to $44.6 million with EBITDA margin improving to 15.1% compared to 1H16 of 12.6%.
Distributing and selling expenses saw a 2.5% decrease to $120.1 million in 1H17 from $123.2 million in 1H16.
Overall, the group generated a net increase in cash and cash equivalents of $8.9 million in 1H17, ending the period with cash and cash equivalents of $128.1 million.
The board has recommended a tax-exempt interim dividend of 1 cent per share for 1H17, double that of last year.
In its outlook, BreadTalk says it remains on course to consolidate underperforming operations and expand its footprint in high performing markets.
While new outlet will open at a cautious pace, the group will continue to focus on improving overall profitability and quality of earnings for FY17.
“We are committed to streamline existing portfolios and identify new growth opportunities. This places the Group in a strong position to rise above the difficult retail environment,” says George Quek, Chairman, BreadTalk Group.
Shares in BreadTalk closed 4 cents higher at $1.80 on Wednesday.
