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FOOD & BEVERAGE | Staff Reporter, Singapore

BreadTalk Group H1 profit plummeted 72.2% to $3.62m

It recognised a $9.3m capital gain from the sale of its stake in TripleOne Somerset.

BreadTalk Group's profit for the first half of 2018 plummeted by 72.2% to $3.62m from $13.01m last year.

Meanwhile, revenue grew by 0.7% to $297.37m from $295.4m last year.

According to its financial statement, profit fell due to the recognition of net capital gain worth $9.3m from the sale of BreadTalk’s investment in TripleOne Somerset. Revenue was up, however, thanks to growth from the food atrium and restaurant divisions as well as contribution by the 4orth Division, offset by a decline at the bakery division.

The bakery division’s revenue declined 4.9% YoY to $139m due to lower revenue from directly operated stores in Shanghai, Beijing and Hong Kong, as well as lower franchise revenue from China. “This was mitigated by stronger revenue from directly operated stores in Singapore and higher international franchise revenue,” BreadTalk said.

The food atrium division’s revenue grew 3.6% YoY to $76.3m despite having three less outlets than a year ago thanks to higher same-store sales growth momentum across the entire portfolio, especially in China.

The restaurant division’s revenue rose 6.7% YoY to $74.1m with the addition of three more outlets – one in Singapore and two in Thailand. Earnings rose 10.8% to $15.8m primarily due to higher revenue offset by higher administrative expenses incurred for the upcoming Din Tai Fung outlet in the UK.

4orth Division turned in a revenue of $5.7m. It currently comprises five outlets of So Ramen in Singapore, two outlets of Song Fa Bak Kut Teh (Song Fa), and one outlet of Una-Yu in Shanghai, China.

For the second quarter, profit was up by 10.5% to $2.44m whilst revenue grew by 0.8% to $148.83m.

“We may expect short-term earnings volatility as certain capital and operating expenditures will need to be incurred and invested to realise our medium to long-term goals,” BreadTalk said. “We are also mindful of the potential impact that volatility in some key currencies may add to our financial performance.”

BreadTalk declared a dividend of 0.5 cents to be paid on 21 August 2018. 

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