BreadTalk reports 3Q19 net profit tumbled 81 percent

BreadTalk and Toast Box outlets at Singapore’s VivoCity mall; taken September 2018.BreadTalk and Toast Box outlets at Singapore’s VivoCity mall; taken September 2018.

BreadTalk reported Tuesday its third quarter net profit tumbled 81 percent on-year to S$500,000 as the bakery division posted a loss before tax.

Revenue for the quarter ended 30 September increased 10.1 percent on-year to S$173.6 million, the bun maker said in a filing to SGX.

Other income for the quarter fell 21.3 percent on-year to S$8.54 million, BreadTalk said.

For the bakery division, BreadTalk reported a loss before tax of S$1.9 million, swinging from a year-ago profit before tax of S$2.4 million, the filing said. That was despite the segment’s revenue rising 4.2 percent on-year to S$76.1 million.

BreadTalk didn’t provide an explanation for the third quarter Bakery performance, but for the nine-month period, it noted the segment’s revenue would have fallen 4.9 percent, excluding the consolidation of revenue from the Thailand bakery business, amid lower contributions from the direct-operated and franchise stores in China.

The food atrium segment reported revenue rose 1.1 percent on-year to S$41.3 million in the third quarter, with profit before tax dropping 16.5 percent on-year to S$3.9 million.

For the nine-month period, BreadTalk said the food atrium division saw lower same-store sales in Hong Kong due to the ongoing social unrest.

The restaurant segment reported third-quarter revenue rose 16.4 percent on-year to S$45.1 million, while profit before tax increased 52.8 percent on-year to S$8 million.

The 4orth segment reported third-quarter revenue surged 154.8 percent on-year to S$10.1 million, while its loss before tax widened to S$2.6 million from a S$800,000 loss in the year-ago period on start-up costs for new outlets and as some outlets performed below expectations.

BreadTalk recommended an interim dividend of 0.5 Singapore cent a share, compared with no dividend in the year-ago period.

In its outlook, BreadTalk said it would continue to focus on its cost structure.

“Efforts to turn around the bakery business, particularly in China and Thailand remain underway, while we continue to build on the strong performance of the business in Singapore. The bakery division is expected to place additional emphasis on turning around loss making stores and at the same time seek more ways to create value for our franchisees,” the statement said.

“The ongoing social unrest in Hong Kong is expected to have a negative impact to our Food Atrium and bakery businesses in the territory. The group will be monitoring the situation closely and will mitigate its impact as much as possible,” BreadTalk said.

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