Higher impairment charge worsens losses of Tung Lok Restaurants

SINGAPORE - Tung Lok Restaurants (2000) said its net loss widened to $6.8 million from $3.2 million.

Revenue for the year ended March 31 fell by 4 per cent to $77.9 million.

This was mainly due to lower revenue contributions as a result of closing four outlets during the year and loss of revenue from two other outlets that were closed last year, amounting to $7 million.

Renovations of outlets and lower food & beverage sales from existing outlets impacted the group's revenue by S$3.1 million.

However, this was partially offset by increase in revenue contributed by three outlets opened last year as well as contributions by four new outlets this year.

There was also a rise in revenue contributed by catering sales.

Gross profit fell by 4 per cent to $56.1 million, in line with lower revenue.

However, gross profit margin marginally improved by 0.5 percentage point to 72.1 per cent, due to increased operating efficiencies as well as upward revision in menu pricing.

Higher impairment cost on plant and equipment exacted a toll on the bottomline.

Loss per share worsened to 4.01 cents from 1.81 cents previously while net asset value per share rose by 0.25 cent to 3.25 cents.

Tung Lok said the food and beverage industry landscape is expected to remain challenging for the next 12 months due to rising food, staff and rental costs, coupled with tight labour supply and stiff market competition.

It will remain focused to improve revenue and manage operating costs.

"In view of the labour crunch in Singapore that is expected to remain until 2020, the group will strive to overcome the various challenges by streamlining, outsourcing and automating processes to enhance productivity as well as reducing reliance on labour by deploying technology," it added.