Neo Group Q3 profit falls 97.4% on absence of one-time gain

Chefs working in a kitchen, one of the four central kitchens by Neo Group, a catering company.
Chefs working in a kitchen, one of the four central kitchens by Neo Group, a catering company.PHOTO: NEO GROUP

SINGAPORE - Catering company Neo Group saw pofit tumble 97.4 per cent to S$125,000 for the third quarter ended Dec 31, 2016, from S$4.8 million in the year-ago period, it reported on Thursday (Feb 9).

It said this was due to the absence of a S$4.3 million one-time gain recognised in the comparable quarter last year from the bargain purchase on the acquisition of subsidiaries.

Revenue grew by 23.4 per cent to S$46.7 million, due largely to the S$7.6 million rise in contribution from the group's food and catering supplies business, which started supplying and trading frozen meat to a local third-party customer.

Earnings per share fell to 0.09 Singapore cent for the quarter from 3.34 Singapore cents a year ago.

No dividend was recommended.

The company said it expects the group's operations to remain profitable for the current year despite challenges to the industry.

The food catering business will continue to focus on strengthening its recurring income streams by pursuing more corporate clients and venue partnerships. On Nov 16 2016, the Group established a 51 per cent-owned subsidiary, namely Gourmetz Pte Ltd, which targets growing elder-care and childcare market segments.

The food retail business will review its business model to reduce the losses for the group.

Neo Group said the food manufacturing business is currently on the right track to generate operating profit and it will continue to improve the business' operational efficiency as well as widen its product offerings.

The food trading business is expected to continue to grow and consistently contribute to the group.