Iconic Singaporean food and beverage player BreadTalk reported net profit for the second quarter rose 10.5 percent to S$2.5 million, outstripping revenue growth, as management pointed to cost management and brand diversity.
Revenue for the second quarter rose 0.8 percent on-year to S$148.8 million, while the net margin increased to 1.6 percent from 1.5 percent in the year-earlier period, it said in a filing to SGX after the market close on Wednesday.
“This is achieved through the group’s continual focus on enhancing operational efficiency and growing its portfolio of brands through strategic partnerships. This enabled the group to perform despite the challenging retail landscape,” it said.
BreadTalk added that the revenue increase was driven by growth from the Food Atrium, Restaurant and the 4orth Food Concepts divisions, which helped to offset the “sub-optimal” performance of the bakery division.
Bakery division revenue declined 5.2 percent on-year in the quarter to S$68.6 million on lower revenue from direct operated stores in Shanghai, Beijing and Hong Kong, and franchise revenue from China, offset partly by higher revenue from direct operated stores in
Singapore and international franchises, it said.
The share of results of associates and joint ventures was a combined loss of S$500,000, compared with a loss of S$200,000 in the year-earlier quarter, mainly on a weaker performance from Jumbo China, Carl’s Jr Shanghai and BreadTalk-Minor Thailand associates and joint ventures, it said.
Interest expense jumped 111.7 percent on-year in the quarter to S$2.422 million, but that was mitigated by a 297.0 percent on-year increase in interest income to S$1.179 million, it said.
In the first half, net profit fell 72.2 percent on-year to S$3.6 million, while revenue increased 0.7 percent on-year to S$297.4 million, it said. For the first half, the net margin fell to 1.2 percent from 4.4 percent in the year-earlier period, it said.
BreadTalk proposed a special dividend of 0.5 Singapore cent a share for period, the same as in the year-earlier period, it said.
In a separate SGX filing, BreadTalk said that Oh Eng Lock would resign as executive director, effective 31 August, to pursue his own interests.