Restaurant chain operator Hi-Lai Foods Co’s (漢來美食) net income plunged 43.9 percent last quarter from a year earlier to NT$42.76 million (US$1.44 million), as soaring food costs squeezed profit margins.
The company also expects a spike in COVID-19 cases to continue to weigh on business this quarter.
The company’s financial results suggested earnings per share of NT$1.01 for last quarter, a new low for the period, although it is usually the restaurant sector’s high season.
Photo: Amy Yang, Taipei Times
First-quarter revenue rose 6.13 percent from a quarter earlier to a record high of NT$1.04 billion, but gross margin slipped to 43.2 percent, as price increases failed to counter the impact of cost hikes and a decline in business, the company said last week
.Kaohsiung-based Hi-Lai, which operates popular buffet restaurant Hilai Restaurant (漢來海港餐廳), Hi-Lai Vegetarian Restaurant (漢來蔬食) and luxury Chinese restaurant Celebrity Cuisine (名人坊), is expecting weak sales this quarter because its revenue for last month declined to an eight-month low of NT$203 million.
People in Taiwan are avoiding dining out as COVID-19 cases hit more than 60,000 per day this month.
Earnings from non-core operations plummeted more than 90 percent both quarterly and annually, company data showed.
The company has highlighted meal boxes and revived promotions in the hopes of reducing the effects of the COVID-19 pandemic.
However, analysts are upbeat and expect Hi-Lai’s earnings to improve in the second half of this year when the number of COVID-19 cases is likely to drop.
The company has pressed ahead with its plan to open a hotel in Taipei’s Nangang District (南港) that is to house nine affiliated restaurants and is expected boost overall sales.
Hi-Lai said it would not give up on its plan to add four to five new restaurants later this year.
Hi-Lai Foods shares yesterday rose 3.47 percent to NT$104.5, higher than the TAIEX’s 0.98 percent increase, Taiwan Stock Exchange data showed.
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