Japan Foods Q1 earnings up 24% on more outlets, higher margins

Japan Food Holdings, which operates noodle chain Ajisen Ramen, saw its revenue rise in its first quarter.
Japan Food Holdings, which operates noodle chain Ajisen Ramen, saw its revenue rise in its first quarter.PHOTO: AJISEN

SINGAPORE - Japan Foods Holding reported improved earnings in its first quarter, as it saw better profit margin and higher revenue coming from a larger number of stores.

Revenue for the Catalist-listed company - which operates food and beverage chains such as Ajisen Ramen, Osaka Ohsho and Menya Musashi - rose 6.4 per cent year on year to S$16.8 million in the three months ended June 30.

With gross profit margin rising from 83.5 per cent to 84.5 per cent in the quarter, net profit was S$1.3 million, up 24.1 per cent from S$1.1 million a year ago.

At the end of the quarter, Japan Foods had grown the number of its Singapore outlets to 50, compared with 48 a year ago.

Revenue from the Ajisen Ramen and Keika Ramen brands slipped 12.5 per cent to S$6.3 million, due partly to closure of restaurants at Compass Point and Tiong Bahru Plaza for renovation and lower net sales from some other outlets.

But restaurants under other brands - such as New ManLee Bak Kut Teh and Kazokutei - recorded an increase in revenue of S$1.8 million in the quarter.

New ManLee is Japan Foods' first non-Japanese brand. Following the launch in December, the group now has three restaurants and has received "very encouraging response", it said when announcing the results on Thursday (Aug 4).

Japan Foods intends to increase the number of restaurants under the New ManLee Bak Kut Teh brand in Singapore, subject to availability of good location.

However, the overall operating environment in Singapore's food and beverage industry will remain challenging over the next 12 months, it cautioned, "due to intense competition, tight labour supply, rising business costs and uncertain economic outlook."

Japan Foods shares rose two cents or 5.71 per cent to 37 cents by noon, following the results announcement before market opened.