SINGAPORE (Nov 7): Japan Foods announced that its 2Q18 earnings dropped 4% to $1.30 million compared to $1.35 million a year ago.
Revenue for the second quarter ended September came in at $16.8 million, 0.7% higher than $16.6 million in 2Q17.
This was due to an increase in revenue from the group’s restaurants operating under the Ajisen Ramen, Keika Ramen and Menya Musashi brands, but was offset by a decrease in revenue from its restaurants operating under other brands.
Revenue from the Ajisen Ramen and Keika Ramen increased to $7.0 million in 2Q18 from $6.5 million the previous year, mainly attributable to the opening of two restaurants at Compass Point and Bedok Mall in September 2016 and March 2017 respectively and higher net sales generated from some existing restaurants, but was partially offset by the closure of a restaurant at Bedok Point in March 2017.
Revenue from the Menya Musashi brand increased to $3.6 million compared to $3.2 million in 2Q17, mainly attributable to the conversion of a New ManLee Bak Kut Teh brand restaurant to a Menya Musashi at Clementi Mall in April 2017 and opening of a new restaurant at Northpoint City in September 2017, but was partially offset by the conversion of a restaurant at Bedok Mall to “Ajisen Ramen” brand in March 2017.
However, the group’s other restaurant brands recorded a decrease in revenue of $1.6 million in 2Q18 compared to 2Q17, mainly due to closures of restaurants and lower same store sales, but was partially offset by an $800,000 increase in revenue from new Shitamachi Tendon Akimitsu restaurants.
Cost of sales saw a slight increase of 0.2% to $2.48 million from $2.47 million last year.
This resulted in a 0.8% increase in 2Q18 gross profit to $14.3 million compared to $14.2 million a year ago.
Other income was 32.3% lower at $179,000 from $264,000 last year due to lower government grant in 2Q2018.
Other operating expenses for 2Q18 also saw a 14.3% decrease to $282,000 compared to $329,000 from the same period a year ago.
The group’s share of profit of its associated companies decreased by 24.4% to $149,000 from $197,000 2Q217 due to temporary closure of Menya Mushashi restaurants for renovation.
The group has declared a tax-exempt, one-tier interim cash dividend of 0.8 cent per share, which will be paid on Dec 8.
The group expects to remain facing challenges by the food and beverage industry over the next year.
Hence, it will remain vigilant about controlling raw material costs, improving operational efficiency via streamlining of work processes and technology as well as practising good restaurant portfolio management while taking into account market demand and individual restaurant’s profitability.
The group will also continue its efforts to seek opportunities to introduce brands to its markets as well as expand its presence in the Asean region by way of joint ventures, acquisitions and/or sub-franchising of its brands.
Shares in Japan Foods closed 1 cent higher at 42 cents on Tuesday.
