In line with the relaxation of Covid-19 restrictions and the reopening of the economy, Japan Foods Holding is seeing a significant improvement in its 1HFY2023 ended September results.
For one, its has reversed back into profitability with earnings of $2.3 million, compared to a loss of $1.6 million in the same period a year ago.
In tandem with its improved earnings, Japan Foods’ earnings per share in 1HFY2023 rose to 1.34 Singapore cents per share compared to a loss per share of 0.94 Singapore cents in 1HFY2022.
Similarly, revenue was 79.0% higher y-o-y at $38.0 million from $21.2 million a year ago, with improvement experienced across all of the group’s brands. In particular, the group saw a positive response to its new Halal segment, which was further boosted by the lifting of Covid-19 related capacity limits and social gatherings, including dining-in, since Apr 26 compared with 1HFY2022 when stringent Covid-19 safe distancing measures were still in place.
As a result, gross profit came in at $32.2 million, 80.9% higher than $17.8 million a year ago, thanks not only to the growing revenue but also the absence of discounts granted for takeaway orders during the Phase 2 (Heightened Alert) in 1HFY2022.
However, other income saw a 88.1% y-o-y decline to $0.5 million from $4.1 million last year due to lower rental concession from landlords and lower government grants under the Jobs Support Scheme. Expenses also increased across the board due to higher business activities and higher number of outlets operating during 1HFY2023.
As at Sept 30, the group’s financial position remained strong with no borrowings. Cash and cash equivalents stood at $20.3 million.
As a reflection of the group’s ongoing confidence in its long-term prospects, it has declared an interim dividend of 1.00 cent per share, double that of 0.5 cent per share declared in the previous year.
During the period, the group expanded to 60 restaurants, with the network growth led by its new Halal segment.
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As at end Oct, the group has five Halal brands - Edo Shokudo, Tokyo Kitchen, Tokyo Shokudo, Yakiniku Shokudo and its newest Kyoto Shokudo – across 13 restaurants.
Following the easing of Covid-19 measures, the group resumed its overseas expansion plans through its joint venture with Minor Food Group (Singapore), beginning with the opening of Siam Smith, a Thai noodle bar, in Tokyo in August 2022.
Takahashi Kenichi, executive chairman and CEO of Japan Foods says: “In 1HFY2023, the Halal segment contributed 25.2% to our total revenue as compared to 15.2% in 1H Y2022. We witnessed its rapid growth from one humble restaurant in Tampines Mall in November 2020 to 12 restaurants across the country in less than two years while the pandemic was still going on… Looking ahead, we plan to capitalise on the growing interest in our Halal brands to expand and develop more concepts that will appeal to this segment.”
“The group is cautiously optimistic about 2HFY2023. We believe that there is a lot of excitement about the upcoming year-end festivities surrounding Christmas and New Year, and Chinese New Year in January 2023. It will be the first time in more than two years that people are allowed to dine out without any restrictions during these holidays and many will be making plans to do so. We intend to capitalise on this by putting a festive touch to our menus. In addition, we look forward to revenue contribution from our recently opened restaurants,” adds Kenichi.
Shares in Japan Foods last traded at 42 cents on Nov 8.
