Sakae Holdings returned to profitability last year, posting a fourth-quarter net profit of $99,000 as the food and beverage group cut administrative and other operating expenses.
Sakae, which operates the Sakae Sushi chain of conveyor-belt sushi restaurants, made a net loss of $5.3 million in the fourth quarter of 2016.
For the three months ended Dec 31 last year, earnings per share stood at 0.15 cent, up from a loss per share of 2.24 cents a year ago.
Sakae's net profit for the 2017 financial year was $1.1 million, or 0.69 cent per share, up from a net loss of $12.6 million, or 5.25 cents per share, a year earlier.
The stock last traded at 21 cents last Thursday.
Fourth-quarter revenue dropped 18 per cent to $18.6 million amid "sluggish economic conditions" that led to weaker market sentiments globally. That decline came even as a new stream of revenue from commodity trading contributed $3 million of sales.
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AT A GLANCE
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REVENUE: $68.9 million (-20.3%)
NET PROFIT: $1.1 million
The rationalisation of non-performing outlets in the Singapore market contributed to the fall in group revenue, Sakae said. Gross profit margin from the retail business decreased to 51.1 per cent in the fourth quarter from 56.8 per cent a year ago.
But Sakae trimmed administrative expenses by 22 per cent to $6.9 million during the quarter, partly owing to a $5 million drop in labour costs.
Sakae also cut operating expenses by 75 per cent to $2.8 million as the group continued to carry out its rationalisation exercise on non-performing outlets.
That included a $1.4 million net reversal in the latest quarter of overprovisions made in the 2016 financial year for early termination of leases.
Reduction in rental, utilities and other expenses, as a result of the rationalisation exercise, also contributed to the reduced operating expenses.
Despite the higher profit, the group had negative operating cash flows of $8.6 million in the fourth quarter, compared with a positive operating cash flow of $3.8 million in the year-ago period.
In the last financial year, the group had negative operating cash flows of $8.3 million, larger than the $1.4 million outflow in 2016.
Trade receivables grew to $5.5 million as at the end of last year, from $1.9 million at end-2016.
Sakae said that it will "continue to be cautious and take reasonable steps" to ensure continuous growth in its operations.
