Tung Lok Restaurants reports fiscal year swung to net loss

Tung Lok Restaurants (2000) reported Monday its fiscal year swung to a net loss of S$1.84 million from a year-earlier net profit of S$1.0 million as restaurant and catering revenue was suppressed by Covid-related restrictions and on lower grants from the government and landlords.

“FY22 remained a challenging year with the group’s food and beverage (F&B) businesses being subjected to repeated on-off imposition of safe management restrictions with each emergence of more virulent Covid-19 variants, thus imposing considerable economic hardship to the group’s business,” the company said.

Revenue for the 12 months ended 31 March fell 12.6 percent on-year to S$52.22 million on the loss of contributions from closed outlets and on lower contributions from the catering business, the seafood restaurant operator said in a filing to SGX.

That was partly offset by higher revenue from mooncake sales and ready-to-eat frozen food, as well as higher contributions from existing outlets and a new outlet which opened in February 2021, the filing said.

“Since the beginning of Year 2021, the group has closed eight outlets (including two closed in 2H FY22) which were significantly affected by the Covid-19 outbreak. The closures were made so as to better rationalize and streamline the group’s resources as well as manage its business costs and optimize operational efficiency amid restrictions and other challenges which impacted revenue generation during the pandemic period,” the company said.

In its outlook, Tung Lok said operations have shown positive signs, with increased footfall and sales volume, as borders have gradually reopened and Singapore transitions to treating Covid-19 as endemic.

“While business momentum is expected to pick up, the group is mindful that the Covid-19 situation remains fluid, and expects headwinds such as intense competition, manpower shortages, cost pressures brought about by inflation as well as the evolving geopolitical climate,” Tung Lok said.

“In response, the group has been focusing its efforts over the past two years to accelerate its digital transformation process to streamline and improve operational efficiencies amid manpower shortage issue,” the company said.