Continue reading this on our app for a better experience

Open in App
Floating Button
Home Capital Results

Kimly 1Q earnings fall 13.9% to $5.7 mil on higher expenses

Michelle Zhu
Michelle Zhu • 2 min read
Kimly 1Q earnings fall 13.9% to $5.7 mil on higher expenses
SINGAPORE (Feb 9): Kimly, the traditional coffee shop operator, has announced earnings of $5.7 million for 1Q18, down 13.9% from $6.7 million reported a year ago on higher expenses.
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

SINGAPORE (Feb 9): Kimly, the traditional coffee shop operator, has announced earnings of $5.7 million for 1Q18, down 13.9% from $6.7 million reported a year ago on higher expenses.

Revenue for the quarter grew 6.8% to $50.1 million, due mainly to higher revenue contribution from the Outlet Management Division with higher sales of beverages and tobacco products, as well as higher income from sub-leasing of coffee shops and food courts and related cleaning and utilities services provided.

In line with the higher revenue, cost of sales grew to $40 million compared to $36.5 million a year ago.

Meanwhile, selling and distribution expenses grew 12.7% to $0.8 million due to the increase in cleaning & packaging materials used, also in line with the increase in revenue.

Administrative expenses grew 17.1% to $3 million compared to $2.5 million a year ago. This was largely due to higher employee benefit expenses due to an increase in headcount, salaries and incentive bonus for executive directors, as well as higher depreciation of property, plant and equipment.

In its outlook, Kimly says it expects the operating environment the local F&B scene to remain challenging with tight labour supply, keen competition and low entry barriers.

Despite these challenges, the group says it remains focused on managing costs and improving productivity and efficiency, while also actively exploring suitable opportunities to grow its business via acquisitions, joint ventures and forming strategic alliances with parties that can help to strengthen its market position.

Vincent Chia, executive director of Kimly, attributes the lower gross profit margin for the latest quarter to the group’s expansion activities over the past year.

“In tandem with this expansion, operating cost also increased with the hiring of more employees and in operating lease expense,” says Chia. He attributes the drop in net profit to the time required for new outlets to ramp up sales and generate economies of scale.

“Going forward, the group remains focused on managing cost and improving productivity and operational efficiency. To this end, we have stepped up investments in IT infrastructure and proprietary software, which also resulted in higher depreciation expense in1Q18, to manage our business and automate back office functions to maximise our manpower resources,” he adds.

Shares in Kimly closed 2 cents lower at 34 cents on Friday.

Highlights

Re test Testing QA Spotlight
1000th issue

Re test Testing QA Spotlight

×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.