SINGAPORE (May 8): Japanese restaurant operator RE&S Group saw its 3Q18 earnings halve to $0.9 million from $1.9 million a year ago on higher expenses and after taking into account one-off IPO expenses of $1.1 million.
Revenue for 3Q grew 2% to $35.3 million on the growth of contributions from the quick-service restaurants, convenience and others segment.
Raw materials and other consumables used came in at $9.7 million, 5.3% higher than $9.2 million a year ago. As a percentage of revenue, it remained constant at 27.6% when compared to that of 3Q17.
Employee benefits expense grew 4% $12.2 million in 3Q18 from $11.8 million previously, which RE&S says is in line with its business expansion efforts.
Meanwhile, depreciation expense also increased by 9.5% on-year to $2.2 million on the back of new outlets.
John Yek, CEO of RE&S, notes continued industry headwinds from the combined challenges of rising competition and tightening labour market.
“Revenue is healthy despite lower than expected results, due to initial gestation for new concepts and new outlets which impacted near term profitability,” comments Yek on the latest set of 3Q results.
“Going forward, we will continue to focus on improving these outlets, as well as selective new outlet openings based on our established concepts. We aim to deliver a better performance for the remaining fiscal year and ultimately derive greater value for our shareholders,” he adds.
Shares in the group closed 6.5% higher at 24 cents on Monday.
