SINGAPORE (Nov 6): BreadTalk announced 3Q earnings rose 22.2% to nearly $4 million compared to a year ago even as revenue fell 2% to $154.3 million.
This came on the back of a 7.1% fall in distribution and selling expenses to $59.2 million.
For the 9M17 ended Sept, earnings more than doubled to $16.8 million which came on the back of a 2.6% fall in revenue to $449.5 million.
Sales from its Bakery Division declined 2.7% y-o-y to $223.1 million due to lower revenue from direct operated stores at Shanghai and Beijing.
Direct operated stores remained relatively unchanged at 255 while franchise outlets increased 15 new ones from the previous year to 604.
The group terminated the franchise agreements of some underperforming franchisees in China which also contributed to lower China franchise profitability.
A 25% stake in the Malaysian bakery business under the group’s subsidiary, ML Breadworks, was also sold to its JV partner.
Furthermore, the group’s food atrium division saw sales decline 2.5% y-o-y to $112.4 million as three outlets were closed.
In the restaurant division, revenue was up 2.5% y-o-y to $104.8 million.
As at Sept 30, the group’s cash and cash equivalents stood at $124.8 million.
The group has declared an interim cash dividend of 1 cent per share which will be payable on Dec 21.
The group says it will continue to develop new growth engines as represented by Din Tai Fung in UK and Song Fa Joint Venture, generating new revenue streams. The group’s first Song Fa Bak Kut Teh outlet in Shanghai and first Din Tai Fung outlet in the UK are expected to open in 2018.
The group says it remains in a good position to improve overall profitability and quality of earnings for FY17.
Shares in BreadTalk last traded at $1.62 on Friday.
