SOUP Holdings to Report Loss for Financial Year 2024
SOUP Holdings expects to report a loss for the financial year ending December 31, 2024, according to a bourse filing on Saturday (December 21).
Reasons for the Expected Loss
The expected loss is likely due to outlet closures, initial losses from new operations, and rising operating costs, said the company, which runs the Chinese restaurant chain Soup Restaurant.
Outlet Closures and New Openings
Two outlets were closed for renovations, and another three outlets were closed due to redevelopment works by their landlord in the first quarter of FY2024.
Two newly opened outlets and a recently established central kitchen also underperformed, incurring losses during their first year of operations.
Rising Operating Costs
The company noted a faster increase in operating costs compared to the growth in revenue, driven by broader macroeconomic conditions, a manpower shortage, and rising rental costs.
Impairment Losses and Decline in Revenue
The company incurred impairment losses of plant and equipment and right-of-use assets from its underperforming restaurant outlets.
It also had a decline in revenue from its food processing, distribution, and procurement services segment, as contracts expired for the supply of ready meals through the central kitchen.
Financial Performance
For the half year ended June 30, 2024, Soup Holdings posted a revenue of S$20.7 million, down 0.6 per cent on year, while net profit fell 87.9 per cent to S$167,000.
Share Price
Shares of Soup Holdings closed 3.1 per cent or S$0.002 lower at S$0.063 on Friday, before the announcement.
Conclusion
SOUP Holdings is expected to report a loss for the financial year 2024 due to a combination of factors, including outlet closures, new operations, and rising operating costs. The company’s financial performance has been impacted by a decline in revenue and a significant decrease in net profit.
FAQs
Q: Why is SOUP Holdings expected to report a loss for the financial year 2024?
A: The company expects to report a loss due to outlet closures, initial losses from new operations, and rising operating costs.
Q: How many outlets were closed for renovations and redevelopment works?
A: Two outlets were closed for renovations, and another three outlets were closed due to redevelopment works by their landlord in the first quarter of FY2024.
Q: What are the reasons for the decline in revenue from the food processing, distribution, and procurement services segment?
A: The decline in revenue is due to the expiration of contracts for the supply of ready meals through the central kitchen.
Q: What is the impact of the impairment losses on the company’s financial performance?
A: The company incurred impairment losses of plant and equipment and right-of-use assets from its underperforming restaurant outlets, which has negatively impacted its financial performance.
Q: What is the current share price of Soup Holdings?
A: Shares of Soup Holdings closed 3.1 per cent or S$0.002 lower at S$0.063 on Friday, before the announcement.
