Sat, Aug 10, 2019 - Page 12 News List

Restaurant chains report profit despite losses in China

By Kwan Shin-han  /  Staff reporter

Restaurant operator Hi-Lai Foods Co (漢來美食) is upbeat about its outlook for the second half of the year after posting record sales and profits in the first half.

“Harbour Restaurant (漢來海港), which accounted for more than half of our sales in the first half, Banquet Hall (漢來宴會廳), and other major brands have all seen steady growth in sales so far this year,” a company official told the Taipei Times by telephone yesterday.

Hi-Lai expects limited impact from China’s ban on individual travel to Taiwan, because most of its customers are local diners, the official said, adding that the company is considering expanding overseas.

As the company is to add three new restaurants in November and its per-store sales have kept rising, revenue could further increase in the second half of the year, analysts said.

Net income for the first half gained 17.84 percent year-on-year to a record NT$156.61 million (US$4.99 million), from NT$132.91 million a year earlier, company data showed.

Earnings per share increased from NT$3.4 to NT$4.24, while gross margin rose by 0.82 percentage points to 44.88 percent, the data showed.

Excluding asset disposal losses from its operations in Xian City in China’s Shaanxi Province, which closed in April, earnings per share would hit NT$4.85, the company said.

Cumulative revenue in the first seven months grew 8.05 percent year-on-year to NT$2.21 billion, from NT$2.04 billion in the same period last year, it said.

Another restaurant chain operator, Wowprime Corp (王品), fared poorly. Its net profit fell 13.57 percent year-on-year to NT$170.39 million in the first half of the year, while earnings per share decreased from NT$2.56 to NT$2.31 due to asset disposal losses from China, impact from the yuan’s depreciation and weaker consumer spending amid the US-China trade dispute.

Gross margin edged down 0.77 percentage points to 45.71 percent, company data showed.

Wowprime’s revenue from China fell 3.89 percent year-on-year to NT$3.9 billion, but sales in Taiwan increased 4.84 percent to NT$5.69 billion in the first seven months, the data showed.

The company is optimistic about its Taiwanese operations this quarter, backed by celebrations for Father’s Day and Lovers’ Day, the company said in a news release.

As of last month, the company had 279 restaurants in Taiwan and 138 in China.

Hi-Lai shares closed up 2.62 percent at NT$137 in Taipei trading on Thursday, while Wowprime shares advanced 1.31 percent to NT$77.50.

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