SINGAPORE (Feb 13): Neo Group, the integrated food solutions provider, recorded 3Q18/19 earnings of $1.7 million, 17.7% lower than $2.1 million in 3Q17/18.
This brings 9M18/19 earnings to $1.5 million, 67% higher than $0.9 million in 9M17/18.
The decline in 3Q18/19 earnings was mainly due to the absence of a $0.7 million refund from IRAS in 3Q17/18 for over-provision of income tax expense in the prior years.
Profit before income tax increased by 16.7% to $2.5 million in 3Q18/2019, from $2.2 million a year ago.
During the quarter, the group’s revenue increased by 10.7% to $49.5 million from $44.7 million a year ago, due to higher contribution from the group’s food catering, food retail, food manufacturing and other businesses.
Food catering business revenue increased by 33.5% y-o-y to $23.83 million, mainly due to the strengthening in the group’s recurring income from childcare and elderly market segment by Gourmetz, and the ramping up its “tingkat” business from newly incorporated and newly acquired subsidiaries.
Food retail business revenue increased by 4.0% y-o-y to $4.4 million, mainly attributable to the introduction of new concepts and opening of new outlets. Revenue from the food manufacturing business saw a 2.2% y-o-y increase to $12.9 million, mainly due to an increase in trading activities for its surimi-based products.
Revenue from other businesses saw a slight increase of 1.5% y-o-y to $0.3 million.
However, the overall increase in revenue was partially offset by a 17.2% decrease in revenue from the group’s supplies and trading business to $8.0 million, mainly attributable to a reduction in low margin trading transactions as a result of the ongoing business review.
Other income dropped 40.1% to $0.4 million from $0.7 million last year, mainly due to the decrease in grants received from the government.
Purchases and consumables used increased by 1.7% y-o-y to $20.8 million, while employee benefit expense increased by 19.3% y-o-y to $14.6 million.
As at end December, cash and cash equivalents stood at $16.5 million.
Neo Kah Kiat, founder, chairman and CEO of Neo Group says, “We have sharpened our competitive edge with our strong portfolio of over 20 brands across various business segments, providing the opportunity for cross-selling to a wider spectrum of customers. At the same time, we continued to build upon our Food Manufacturing’s strong brand recognition and global distribution network across over 30 countries to expand our business into overseas markets to be another key pillar of growth for the group.”
“Strategically, we have built-up our synergistic businesses along the value chain to increase our market share and stay ahead of competition. We remain focused on driving operational synergies and efficiencies for bottomline improvements to maximise shareholder returns,” Neo adds.
Shares in Neo Group closed at 43 cents on Wednesday.
