Friday, November 25, 2011

KFCH 3Q earnings dn 12.2% to RM33.5m as inflation bites

KUALA LUMPUR (Nov 25): KFC Holdings (Malaysia) Bhd reported a 12.2% decline in its third quarter earnings to RM33.52 million from RM38.20 million a year ago as it was affected by the higher food, commodity and energy costs.

It said on Friday, the Group's investments in KFC India and KFCH International College continued to incur initial start-up loss before they achieve critical mass of operations.

KFCH's revenue rose 10.5% to RM697.83 million from RM631.55 million. However, profit before tax decreased by 13% to RM 48.9 million from RM 56.2 mil on-year. Its earnings per share were 4.23 sen compared with 4.82 sen.

Its nine-month earnings shed 2% to RM106 million from RM108.17 million in the previous corresponding period.'' Its revenue rose 10.5% to RM2.032 billion from RM1.838 billion a year ago.

On the Malaysian operations, it said KFCH Malaysia's revenue increased by 10.2% to RM1.200 billion (2010 : RM1.089 billion) and profit before tax increased by 6.4% to RM148.60 million (2010 : RM139.60 million).

It said the Malaysian operations continued to expand its network, where 28 new restaurants including eight drive-thru restaurants were opened over the last 12 months. This increased the total number to'' 529 restaurants at end September 2011 (2010: 501 restaurants ).

KFCH also said 22 existing restaurants were remodeled during the period under review.

It added that during the period, it introduced innovative products including value promotions to encourage new trials and repeat visits.

'Profits was subjected to cost pressures arising from higher restaurants' supplies costs and labour costs as well as higher'' energy costs pursuant to the upward revision of electricity tariff in June 2011,' it said

On the Singapore operations, it said revenue rose 14.4% to RM300.70 million (2010: RM262.90 million) and profit before tax increased by 14.9% to RM13.10 million (2010: RM11.40 million).

As for the Brunei operations, it said revenue increased to RM14.30 million (2010: RM11.50 million) and profit before tax declined to RM800,000 (2010: RM1.4 million) due to inflationary pressures.

There were 10 KFC restaurants in Brunei as at end September 2011 with the addition of a new restaurant and the reopening of a temporarily closed outlet since October 2010.

On the Indian operations, it said revenue increased to RM13.80 million (2010: RM2.90 million) in tandem with the higher number of restaurants.

KFC India added eight restaurants during the 12 months ended September 2011 which increased its footprint to 10 restaurants (2010: 2 restaurants).

'However, it posted loss of RM 6.8 million (2010: RM2.20 million) due to initial start-up costs incurred for general and administration expenditures while the restaurants were being developed,' it said.

On the KFCH group's integrated poultry segment, it said revenue rose 7.0% to RM423.90 million (2010: RM 396.20 million) but profits declined to RM1.5 million (2010: RM 3.4 million).

'Sales of chicken products to the KFC restaurants and external customers improved but profit was adversely affected by the higher cost of broiler purchases as the group had to source from the open market to supplement the requirements of its expanded KFC network of restaurants,' it said.

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