Kimly reported Wednesday its fiscal first half net profit fell 14.7 percent on-year to S$18.5 million on higher expenses, partly related to online food delivery fees.
Revenue for the six months ended 31 March grew 27.9 percent on-year to S$156.9 million on contributions from the newly acquired Tenderfresh business, the Singapore-style coffee shop operator said in a filing to SGX.
The food retail division was the largest revenue contributor, posting S$96.7 million in revenue for the fiscal first half, up 61 percent on-year.
The outlet management division reported revenue in the fiscal first half fell 3.6 percent on-year to S$56.9 million.
The outlet investment division posted fiscal first half revenue fell 10.8 percent on-year to S$3.3 million.
“This was attributable to the decrease in sale of beverages and tobacco products, arising from lower footfall at most of the group’s coffeeshops due to Covid-19 restrictions imposed in view of rising cases. The group only allowed a group of up to two to dine in as it was relatively challenging to enhance vaccine differentiated controls in coffeeshop setting,” Kimly said.
Selling and distribution expenses for the six-month period more than doubled to S$10.47 million, from S$4.80 million in the year-ago period, mainly on higher online food delivery fees and packing materials expenses related to the Tenderfresh business, Kimly said.
Kimly proposed an interim dividend of 0.56 Singapore cent, unchanged on-year.
Kimly issued a cautious outlook.
“The operating environment in the Food and Beverages (F&B) industry is expected to remain challenging as the local F&B players are facing mounting operating cost pressures brought by the ongoing manpower crunch due to tightening of foreign manpower policy and rising costs of raw materials, rental and utilities. Intensifying competition has also further exacerbated the situation,” Kimly said.
Kimly added it expected lower footfall at its coffeeshops as they are mainly located in Singapore’s heartlands areas, while employees are likely to begin returning to workplaces, with work-from-home no longer the default as Covid-related restrictions are eased.