Major restaurant operators reported mixed results for the past quarter, while they generally agreed that the latest food safety issue could affect their businesses this quarter.
Wowprime Corp (王品集團) earlier this week posted net income of NT$174.43 million (US$5.67 million) for the third quarter of the year, down 35.17 percent from NT$269.05 million a year earlier.
Last quarter’s results showed a year-on-year decline in Wowprime’s quarterly profit for the fifth quarter in a row. Despite the July-to-September quarter being the traditional peak period for the food and beverage sector, Wowprime’s profit in the quarter was 19.82 percent lower than the NT$217.55 million it made in the previous quarter, according to company data.
Earnings per share (EPS) were NT$2.27 last quarter, compared with NT$3.49 a year ago and NT$2.83 the previous quarter.
Analysts said the company’s profit decline last quarter reflected a significant margin contraction due to slower turnover and rising food costs, while the company attributed the weakness to the recent food safety issues.
Earlier this month, Wowprime chairman Steve Day (戴勝益) said the scandals dragged down the company’s third-quarter sales by between 10 and 15 percent from its normal performance during the period.
The company’s operating margin fell to 6.5 percent last quarter, compared with 9.6 percent a year earlier and 7.6 percent in the previous quarter, according to company data.
“The weak results and recent food issues signal that the red light is still on,” JPMorgan Securities Ltd said in a client note, adding that the food safety issues would have more negative impact this quarter.
For the first three quarters of the year, Wowprime’s net income totaled NT$690.64 million, or NT$8.97 per share, compared with NT$872.3 million, or NT$11.33 per share, recorded a year earlier, said Wowprime, which operates 15 restaurant chains with 415 outlets in Taiwan, China and Singapore.
Gourmet Master Co (美食達人), which owns cafe and bakery chain 85oC (85度C), saw net income shrink 21.1 percent last quarter from a year earlier to NT$124.36 million, with EPS of NT$0.88.
In addition to the negative impact of tainted oil scandals, Gourmet also experienced rising operating costs and the financial implications of converting three directly owned stores into franchises in China, as well as other store renovations during the quarter ended in September, Gourmet Master said in a statement this week.
Overall, the company posted net profit of NT$315.79 million, or NT$2.24 per share, in the first three quarters of the year, down from NT$482.41 million, or NT$3.42 per share, recorded in the same period last year.
Meanwhile, Tai Tong Food & Beverage Group (TTFB, 瓦城泰統集團) saw net profit increase 2.14 percent last quarter from a year earlier to NT$NT$76.83 million, or NT$3.3 per share, and aims to raise its sales and profit further amid store expansion work.
TTFB, which operates five restaurant chains with 68 outlets in Taiwan and China, posted profit of NT$224.67 million, or EPS of NT$9.64, in the first three quarters of the year.
The company said in a statement that it aims to raise its total outlets to 76 by the end of this year.
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