Tung Lok Restaurants reports fiscal 1H swung to net loss amid Covid-related disruptions

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  • Tung Lok Restaurants swings to fiscal first half loss
  • Covid-related restrictions weighed on revenue
  • Group is exploring ways to boost sales of heat-and-serve frozen food products

Tung Lok Restaurants reported Friday its fiscal first half swung to a net loss of S$3.45 million from a year-ago net profit of S$199,000 as its “operations continued to be severely and adversely disrupted by the COVID-19 pandemic.”

Government support measures have been tapering off, the company noted.

Revenue for the six months ended 30 September dropped 10 percent on-year to S$20.30 million, the company said in a filing to SGX.

Tung Lok pointed to the six-month period’s tightening of safe management measures, such as dine-in prohibitions, limits
on group dining size, reduced operating capacity and restrictions on gatherings and events especially during the heightened alert
periods starting from 16 May 2021.

In addition, from 16 May to 20 June and from 22 July to 9 August, dine-in service was prohibited and only deliveries and takeaways were allowed, Tung Lok noted.

That lowered revenue from the catering business, and some outlet closures during the period and lower sales of ready-to-eat frozen food also hurt results, the company said. Offsetting that, existing outlets, mooncake sales and a new outlet contributed, the filing said.

The group has closed eight outlets to streamline resources.

Outlook

Tung Lok said it was cautiously optimistic, citing Singapore’s high vaccination rate and gradual move toward an endemic phase of the pandemic.

“However, the Covid-19 situation remains fluid and possible changes in the governmental measures which evolve with the pandemic
situation cannot be ruled out,” Tung Lok said. “The group will continue to closely monitor the Covid-19 pandemic situation and shall adjust and react proactively to the evolving landscape. The group will also enhance its online sale channels and efforts by exploring new e-commerce platforms to drive up the sales of its heat-and-serve frozen food products while exploring new market opportunities.”

Tung Lok said that barring unforeseen circumstances, the company expects to meet its short-term obligations as they fall due over the next 12 months.