SINGAPORE (Jan 16): BreadTalk Group, one of the biggest Singapore food and beverage names, is likely to report a loss for the financial year ended Dec 31 2019.
At the nine-month mark, the company had already reported earnings of just $1.7 million, down 71.9% y-o-y versus nearly $6.1 million from the year earlier nine-month period. That’s despite the company generating 8.7% increase in revenue to $494.6 million for the nine month ended Sept 30 2019.
In an SGX filing on Jan 16, it blames the likely losses to the following factors. First, it will suffer wider losses at its bakery business in China and Thailand.
Next, it is likely to suffer losses at its so-called 4orth division, due to a “challenging operating environment.” This 4orth division houses the operation of BreadTalk’s new brands such as Wu Pao Chun, Song Fa, Tai Gai and Nayuki.
Last but not least, BreadTalk blames the recent unrest in Hong Kong to cause “significant deterioration” in the financial performance of its bakery and food atrium divisions in the former British colony.
“The Group is still in the process of finalising its unaudited financial results for FY2019. Further details of the Group’s financial results will be disclosed when the Group finalises and announces its unaudited financial results for FY2019 on or around 24 February 2020,” the company states.
In August last year, the company announced that Chu Heng Hwee is resigning from his post as the group CEO. His last day was Dec 31 2019. George Quek, BreadTalk’s iconic founder and group executive chairman, is covering the group CEO duties.
In the past 12 months, BreadTalk’s share price has dropped from 88 cents to close at 69 cents on Jan 16. At this level, the company is trading at a historical price earnings ratio of 44.4 times.
