Koufu reports 2Q18 net profit falls slightly as interest income fell

Singapore two-dollar bills

Singapore food-court operator Koufu reported its second quarter net profit fell 2.6 percent on-year to S$6.16 million amid a decline in interest income.

Finance income fell 83 percent on-year in the quarter to S$61,000 from S$358,000 in the year-ago period due to a decrease in income from convertible loan notes which were sold in 2017 as part of a restructuring exercise, it said in a filing to SGX after the market close on Wednesday.

Revenue was up 1.2 percent on-year in the quarter at S$54.15 million, it said in its first earnings release since its initial public offering (IPO) in July.

Koufu attributed the revenue rise mainly to contributions from the outlet and mall management segment on two new food courts opened in the first and second quarter of the year at Fusionopolis and Oasis Terrace respectively, partially offset by the closure of  one unprofitable coffee shop at Block 204 Choa Chu Kang Avenue 1 in the first quarter.

For the first half, Koufu reported net profit fell 1.4 percent on-year to S$12.36 million, while revenue rose 2.1 percent to S$109.23 million.

In its outlook, Koufu said it planned to continue to expand its business in Singapore by establishing new F&B outlets in strategic locations, with a focus on hospitals, commercial malls, tertiary educational institutions and new housing estates.

It plans to open an Elemen full-service restaurant at the Paya Lebar Quarter and a Koufu food court at T-Space in Tampines in the fourth quarter, Koufu said.

But it also had some words of caution.

“The food and beverage industry which has low barriers of entry continues to be highly competitive with new food concepts and options available for consumers. Increasing rental costs and labour costs as a result of labour shortage continues to be the key challenges faced in the F&B industry,” Koufu said.

As on Wednesday, Koufu’s outlet & mall management segment, which contributed nearly half of its revenue in the first half, had a network of 47 food courts, 14 coffee shops, a hawker center at Jurong West Hawker Centre and Market, and commercial mall Punggol Plaza in Singapore, as well as a food court at Sands Cotai Central in Macau, the filing said.

The F&B Retail segment, which contributed slightly more than half of first half revenue, has 81 self-operated F&B stalls, five F&B kiosks, 11 quick-service restaurants and three full-service restaurants in Singapore, as well as operating two F&B stalls and a F&B kiosk in Macau, it said.

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