Jumbo Group's profit slips 1.1% to $3.37m

Blame the increase in all cost segments.

Despite the 6.4% increase in its revenue to $34.8m, multi-dining concept food and beverage group Jumbo posted a 1.1% decline in net profit to $3.37m.

According to the group's announcements, this may well be rooted from the increase in expenses, particularly in the employee benefits expense which jumped 5.5% to $9.8m and the operating lease costs which expanded by 24.5% to $3.5m.

Meanwhile, depreciation expenses also increased, up 29.8% to $1.2m due to the depreciation for its new outlets and new corporate offices in Singapore and Shanghai, PRC.

Other operating expenses bucked the trend, declining by 11.3% to $2.7m in the said quarter.

Looking ahead, the group plans to expand its brands to other major cities in Asia and pursue franchising opportunities to diversify and grow its business offerings. 

In May 2017, the first franchised JUMBO Seafood restaurant began operations in Ho Chi Minh City, Vietnam. Plans are underway to establish more franchised JUMBO Seafood restaurants in the next 6 months.

The F&B industry is expected to continue to be challenging, given the weak economic outlook coupled with pressure on operating costs and keen competition.

Nonetheless, Jumbo said it will continue to leverage on its brands and talents to stay competitive, strengthen and broaden its portfolio of brands for sales and profitability.

"The group will also continue to explore suitable opportunities to expand its network of F&B outlets and business through the opening of new outlets, acquisitions, joint ventures and strategic alliances with partners, who can strengthen its market position and add value to its existing business," Jumbo said.