Kimly's sees net profit dip of 6.1% YoY in H1 2024

This was despite a 1.9% increase in revenue.

Coffee chain Kimly reported a net profit of $17.53m net profit for the first half of its financial year 2024 (H124) ending 31 March, down 6.1% from a year ago.

This was despite a 1.9% increase in revenue which was logged at $158.47m. Broken down, revenue from its outlet management decision and outlet investment business division increased by $2.2m to $66.4m. This was following the opening of three new coffee shops during the fiscal year 2023 (FY23) and two others in H124, as well as higher revenue from the provision of cleaning and utility services.

However, revenue was also affected by a decrease in contribution following the termination of management agreements of four coffee shops and the closure of another in FY23 and H124, respectively.

Kimly said its food retail unit recorded a revenue of $92.0m in the first half, which was up by $800,000 from the same period last year. This was attributed to gains from 13 food stalls, a restaurant, and a kiosk opened during FY23. The addition of three food stalls and two restaurants in H124 further contributed to the growth, it added.

This increase was offset by a decline in contribution from existing food stalls/outlets, a decrease in revenue contribution from the closure of six underperforming food stalls during FY23 and an additional three food stalls closure during H124 and the completion of the disposal of the Confectionary Business in December 2022, the company noted.

Meanwhile, the cost of sales also increased by 1.2% to $114.35m due to higher employee benefit expenses from the salary adjustment across the board, higher utilities charges and cleaning fee expenses. This was partially offset by the decrease in food ingredient expenses due to changes in the sales mix.

Kimly has declared an interim dividend of 1.00 Singapore cents per share in H1 2024 “as a token of appreciation for the ongoing loyalty and support from shareholders.” This was up 78.6% compared to the interim dividend of 0.56 Singapore cent per share a year ago.

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The company plans to expand in the Halal market as it observed an increase in demand for Halal-certified food.

“Moving ahead, the Group will be proactively implementing measures to optimise resources, ensuring sustainable returns for shareholders and enhancing profitability. Besides that, we will continue to pursue new outlet opportunities to broaden our reach, with a focused emphasis on identifying strategically located coffee shops within well-established neighbourhoods,” it added.