Tung Lok warns of full-year loss on Covid-19 curbs

Tung Lok has put in place cost-cutting measures such as reduction of casual labour.
Tung Lok has put in place cost-cutting measures such as reduction of casual labour.PHOTO: TUNGLOK.COM

SINGAPORE (THE BUSINESS TIMES) - Catalist-listed restaurant group Tung Lok expects to report a net loss for its fiscal year ended March 31, 2020.

"The Covid-19 pandemic and the consequential social distancing measures have adversely affected the businesses of our restaurant outlets and catering services during the final quarter of FY2020," it said in a statement on Wednesday (May 6), adding that the period is typically where the group's restaurants experience significantly higher patronage and generate substantially greater revenue compared to other periods.

Tung Lok has put in place cost-cutting measures such as reduction of casual labour, salaries of executive officers and directors' fees for FY2020 as well as containment of manpower costs through requesting staff to accelerate their utilisation of annual leave, it said.

"Whether these measures will be scaled up or extended shall depend on the development of the situation," the company added.

Currently, 11 out of 26 restaurants in Singapore remain open for deliveries and takeaways with the remaining outlets temporarily closed so as to contain operating expenses.

So far, there is no indication of any major default of accounts receivables, the company said.

"To improve liquidity, the group has secured bank facilities amounting to $5.5 million for general working capital purposes," it added.

Tung Lok shares closed unchanged at $0.147 on Wednesday before the announcement was made.