Sakae Holdings sinks in the red with S$13.4 mln net loss for FY2019

Restaurant chain owner Sakae Holdings on Thursday posted a net loss of S$13.4 million for the fiscal financial year ended June 30, mostly due to an impairment of S$3.2 million from the purchase in equity interest of more than half the stake in food production and trade firm Cocosa Export.

Sakae’s share price was unchanged the next trading day after the post-market announcement was made, at S$0.085. Year-to-date, the group’s shares have tanked 0.43% lower, compared to S$0.15 on January 7, 2019.

In addition to the Cocosa Export impairment, Sakae also recorded an impairment loss of S$2.8 million under other receivables.

The group posted a top line of S$44.4 million for the financial year, a 52.8% step down from S$94.2 million in the previous financial period. Group revenue declined due to a streamlining of operations, Sakae said.

Sakae noted on the rising prices of raw materials and said that it has “effectively managed” the use of those materials for its restaurant business and maintained its gross profit margin at about 62.8%.

Administrative costs fell by 47.7% from S$40.9 million in the previous financial period to S$21.4 million while labour costs fell by 46.9%, from S$31.1 million to S$16.5 million.

Sakae said that the food and beverage industry is facing “intense competition” and cited the “acute labour shortages” faced by the restaurateur, Sakae said it expects ‘operating conditions to be challenging as food, labour, rental and utilities costs continue to rise in the foreseeable next 12 months’.

‘The group continues to work hard to manage the challenging operating conditions in the food and beverage industry,’ it added.