Sushi player Sakae posts fiscal 1Q swung to loss despite lower expenses

Sakae Sushi outlet in Singapore In Paya Lebar Square mall; taken September 2018.Sakae Sushi outlet in Singapore In Paya Lebar Square mall; taken September 2018.
  • Sakae Holdings reported a fiscal first quarter net loss as revenue declined faster than expenses
  • Covid-related restrictions hurt revenue in Singapore and Malaysia
  • Sakae is shifting toward online and delivery orders and has closed some physical outlets

Sushi restauranteur Sakae Holdings reported Sunday its fiscal first quarter swung to a net loss of S$134,000 from a year-ago net profit of S$69,000 even as the decline in revenue outpaced the fall in expenses.

Revenue for the July-to-September period dropped 32.5 percent on-year to S$3.78 million, Sakae said in a filing to SGX.

“During 1QFY2022, both the Singapore and Malaysia governments implemented and extended continued movement control restrictions in response to the Covid-19 pandemic. These included restrictions on dining in restaurant group sizes and prohibition of dining in restaurant as well as reduced operating capacity,” Sakae said in the statement. “Group revenue declined due to the cumulative effects of the Covid-19
control measures.”

Sakae said its steps to implement online orders and delivery services tempered the reduced restaurant operations; the company also reduced the number of physical outlets to focus more on online and delivery sales.

However, the reduced number of stores also reduced revenue, Sakae said.

Administrative expenses fell 22.4 percent on-year to S$3.16 million, other operating expenses declined 9.9 percent on-year to S$735,000, interest on borrowings fell 12.8 percent on-year to S$143,000 and interest on leases fell 10.3 percent on-year to S$130,000, the filing said.

Sakae Sushi, the main brand for serving retail customers, reported fiscal first quarter revenue fell to S$1.19 million from S$3.16 million in the year-ago period, while net profit fell to S$364,000 from S$1.60 million in the year-ago period, the filing said.

Other products and services reported revenue edged down to S$3.19 million from S$3.25 million in the year-ago period, while net profit rose to S$227,000 from S$70,000 in the year-ago period, Sakae said. That segment includes Sakae Teppanyaki, Sakae Delivery, Hei Sushi, Hei Delivery, Senjyu, Sachi, Crepes & Cream and Nouvelle Events, Japanmartsg and Sakae Corporate Advisory.

In its outlook, Sakae said that while Covid-19 entering an endemic phase was cause for optimism on consumer demand and market sentiment, the virus is still causing uncertainty and the group would remain cautious in its planning.

“The group will continue to recalibrate its business strategy and direction by building on its online sales channels and efforts to digitalize its business while exploring new market opportunities, and will also continue to manage business costs cautiously through optimizing operational efficiency,” Sakae said.