SINGAPORE (August 1): Japan Foods Holding announced a 19.9% decline in its 1Q18 earnings ended June to $1 million, from $1.3 million in 1Q17.
Group revenue decreased by $0.6 million or 3.8%, to $16.2 million in 1Q18, from $16.8 million 1Q17. This was due to a decrease in sales and closure of stores from the group’s other brands – not including Ajisen Ramen, Menya Musashi and Osaka Ohsho.
However, the group’s overall gross profit margin improved to 85.0% in 1Q18 from 84.5% in 1Q17 due to the group’s continuing efforts in bulk purchase discounts, raw material costs control, material usage efficiency and product pricing strategy.
Japan Foods’ other operating expenses decreased by $123,000 or 29.4%, to $295,000 in 1Q18 from $418,000 in 1Q17.
This was mainly due to lower franchise expenses relating to the operation of restaurants under the Menya Musashi brand in China in accordance with term of franchise agreement.
Meanwhile, Japan Foods recently launched its latest concept, Shitamachi Tendon Akimitsum, at Plaza Singapore in July and saw “extremely encouraging response”.
Looking forward, the local food and beverage scene is expected to face intense competition, tight labour supply, rising business costs and uncertain economic outlook.
In order to mitigate these challenges, the group will continue its dual strategies of operational efficiency and financial prudence, while seeking opportunities to expand its presence in Asean.
Shares of Japan Foods closed at 45 cents on Tuesday.
