Cafe de Coral's net profit dropped 29.5 pc to $164 million

Hong Kong fast-food chain Cafe de Coral (0341) reported a 29.5 percent year on year decrease in net profit for the year ending in March to HK$164 million, due to ongoing market challenges in Hong Kong and the mainland.

The company declared a final dividend of 30 HK cents per share, up 20 percent from last year. Its shares once rose 15 percent to HK$4.57 after the announcement.

Cafe de Coral said it will implement a share buy-back to conduct on-market repurchases of the company's shares at a maximum aggregate consideration of HK$50 million, as the current trading price does not fully reflect its intrinsic value and business prospects. 

It noted that the decision reflects the board's confidence in the company's long-term business and growth prospects, benefiting the company and creating greater value for its shareholders.

Its revenue decreased by 4.5 percent to HK$8.18 billion. Gross profit margin fell by 0.9 percentage points to 9.5 percent, mainly due to weak consumer sentiment and fierce price competition amid a weak economy. Hong Kong was further impacted by the normalization of outbound spending behavior and weak inbound tourist consumption.

The company highlighted that after a substantial decline in performance in the first half of the year, it saw significant improvement in the second half, with net profit rising by 151 percent compared to the first half of the year and by 32.2 percent compared to the same period of the financial year between 2024 and 2025.

It noted that the US-Israel war on Iran has caused uncertainty over fuel, fertilizer, and other critical commodities with significant spill-over effects on regional and local supply chains. Looking ahead, the company said the mainland market remains its key growth engine, and it will continue to leverage casual dining and institutional catering in Hong Kong.
 

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