Cafe de Coral's interim profit plummets 67 pc

Hong Kong fast food chain Cafe de Coral's (0341) interim net profit slumped 67.6 percent year-on-year to HK$46.7 million, due to normalisation of outbound spending and weak inbound tourist consumption.

It declared an interim dividend of 10 HK cents, down 33.3 percent compared to last year.

Revenue decreased 5.4 percent to HK$4.04 billion for the six months.

Hong Kong businesses saw a 5.7 percent decline to HK$3.3 billion, with the net closure of three stores.

Revenue from the quick service restaurants division fell 5.9 percent to HK$2.4 billion, dragged down by weak local consumption and multiple severe weather events.

Café de Coral Fast Food and Super Super Congee& Noodles experienced negative same store sales growth of 7 percent and 10 percent.

Casual dining business also recorded a 5.6 percent decrease in income to HK$386.2 million, due to rationalisation and optimisation of store networks. 

In mainland China, the chain's revenue dropped 3.8 percent to HK$734.0 million, as economic uncertainty, weak consumer sentiment, intensifying price competition, and structural oversupply weighed on its operation.

The firm opened 11 new shops during the period, operating 190 stores in total. 

For further growth, the company said it would consolidate lower performing stores while identifying and securing attractive, high-traffic locations for new shops. 

It added that the chain will continue enhancing return on investment and protecting healthy margins, as well as expanding our high-quality store network, especially into untapped white space in the Greater Bay Area.