Start-up costs spoil BreadTalk’s up-and-coming Food Atrium division

Expense woes will last for a few quarters.

Stable performances in Singapore and Hong Kong have caused BreadTalk’s Food Atrium division’s revenue to inch up by 6% to $46m, but rising start-up expenses are still the punches in the division’s gut.

According to analysts from OCBC, over 9M15, Food Atrium has ceased operations of three outlets in China, while four new outlets has led to higher start-up expenses, resulting in a net loss.

“We believe such costs will likely continue to hit profitability for a few quarters ahead,” OCBC said.

Meanwhile, BreadTalk’s Bakery division eases some of the pain, as its revenue was up marginally by 1% to $79m, in spite of underperformance from its Beijing, Hong Kong, and Malaysia operations.

“Restaurant division’s revenue rose 12% to S$37m on the back of strong same store sales growth, growing revenue from the two DTF outlets in Thailand, as well as contribution from Sanpoutei. Notably, operating profit gained about 73% to S$6.1m,” OCBC said.