Kimly reports fiscal 4Q net profit fell 6 percent despite higher revenue

A Kimly-owned Rive Gauche outlet at VivoCity mall in Singapore.A Kimly-owned Rive Gauche outlet at VivoCity mall in Singapore.

Kimly reported Tuesday its full fiscal year net profit fell 8.4 percent on-year to S$20.1 million despite higher revenue, amid higher expenses.

Revenue for the year ended 30 September rose 3 percent on-year to S$208.3 million, mainly on higher contributions from the food retail division, the Singapore-style coffee shop operator said in a filing to SGX.

The food retail divisions’ revenue contribution increased due to the acquisition of the Tonkichi and Rive Gauche businesses acquired in July 2018, Kimly said.

That was partly offset by lower revenue from the outlet management division as a coffee shop ceased operation after a lease expired and wasn’t renewed, Kimly said.

Selling and distribution expenses for the full year climbed 30.7 percent on-year to S$5.26 million on increased online food delivery fees, pest control services, and cleaning and packaging materials expenses, Kimly said.

Administrative expenses rose 10.1 percent on-year to S$15.38 million as a higher employee headcount boosted costs and on higher depreciation and increased repair and maintenance expenses, Kimly said.

The income tax expense climbed 22.1 percent on-year to S$3.89 million on a decrease in the partial tax exemption and the removal of a corporate income tax rebate in the year-earlier government budget, the filing said.

Kimly proposed a final dividend of 0.84 Singapore cent a share, in addition to an interim dividend of 0.56 Singapore cent, for a total of 1.40 Singapore cents. The year-ago final dividend was 0.68 Singapore cent, the filing said.

For the fiscal fourth quarter, Kimly reported its fiscal fourth quarter net profit fell 6 percent on-year to S$5.4 million, while revenue slipped 0.9 percent on-year to S$52.5 million.

In its outlook, Kimly said it expected to continue increasing its revenue base and to remain profitable in the current financial year.

“We have recalibrated our corporate strategy to leverage on our improved central kitchen and supply chain functions to pursue direct asset ownership,” Kimly said. “With this strategic shift, we believe that Kimly will be better-equipped to expand our footprint in mature and populated estates with established footfalls, growing our market presence and standing as one of the leading F&B operators in Singapore.”

But the company also pointed to challenges including expected slower economic growth in Singapore and the lower foreign worker quota to come into effect over the next two years.

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