Yum China reports profit of US$411m

Thursday, July 29, 2021

Yum China (9987) reported a mid-year net profit of US$411 million (HK$3.21 billion), surging by 112 percent year-on-year.

Revenue was about US$5 billion, which grew by 37 percent from the same period last year led by accelerated new store openings and same-store sales growth. The company said operating profit growth was further driven by lower commodity prices and productivity improvements.

Sales of KFC and Pizza Hut have both grown by 19 percent and 33 percent respectively.

Earnings per share were 98 US cents. Yum China declared an interim dividend of 12 US cents per share.

With 719 gross new stores opened in the first half, the company expect to open around 1,300 new stores this year. Total stores reached 11,023.

Andy Yeung Ka-wai, the chief financial officer said: “With the lingering effects of the pandemic, we continue to expect full recovery of same-store sales to pre-pandemic levels to take time, with a recovery path that is nonlinear and uneven.”

However, Yeung said the company will continue expansion by starting up more satellite and small-size stores to reduce operating costs and to increase sales.

He said share repurchases have resumed.

As for strengthening protection for food delivery workers, Joey Wat Chui-yung, the chief executive, believes the company has a hybrid mode of cooperation with delivery platforms. Although 60 percent of orders are brought by the delivery platform, the deliveries are done by Yum’s own driver, Wat said.

Drivers' salaries are competitive – two times the minimum wage in Shanghai.