Wowprime Corp (王品集團) shares fell 2.43 percent in Taipei trading yesterday after the company reported a double-digit decline in net profit for the first half of the year.
The restaurant group’s net income in the first six months of the year totaled NT$516.21 million (US$17.18 million), or NT$6.71 per share, down 14.43 percent from NT$603.26 million, or NT$7.83 per share, in the same period last year, it said in a statement on Friday last week.
The report sent the stock falling below the NT$400 mark at one point yesterday before recovering to close at NT$402, Taiwan Stock Exchange data showed.
Wowprime attributed the earnings decline to rising labor costs, which increased by NT$340 million from the same period last year.
“The group raised monthly wages by about 5 percent early this year, leading to higher spending on human resources,” the statement said.
The company also implemented in the second quarter last year a plan allowing employees to allocate part of their monthly salary to purchase Wowprime shares, which is likely to drive up the company’s costs, the statement added.
As a result, net profit fell to NT$217.55 million, or NT$2.83 per share, during the April-to-June period, from NT$284.59 million, or NT$3.7 per share, a year earlier, company data showed.
Despite the pullback, the company maintained its bullish outlook for the second half of the year, saying it has high expectations for its expansion of higher-margin brands in China.
Wowprime is set to open a total of 40 outlets for its four medium to high-end restaurant brands in China in the second half of the year — Wang Steak (王品台塑牛排), Tasty (西堤) and the two exclusive chains in China — which could help the group reach its goal of posting an average net profit margin of 10 percent for this year.
Wowprime chairman Steve Day (戴勝益) in June cut the group’s expansion target this year from 100 to 80 — 50 in Taiwan and 30 in China — amid concern that its employee training might not be able to keep pace with the expansion.
The group operates 297 outlets in Taiwan, 98 in China and one in Singapore as of the end of last month.
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