The company attributes the stronger Singdollar as a reason too, as tourists are finding this a more expensive place to spend.
Japan Foods says that its selling and distribution costs increased by 5.5% y-o-y to $70.9 million, due to costlier manpower, utility and rent.
The company incurred "other operating expenses" of $2.3 million, up 82.9% y-o-y, no thanks to write-offs of renovation costs upon the rebranding and closure of outlets.
The company booked impairment losses of $3.6 million, up 93.4% y-o-y, due to the impairment loss on the loan provided to a joint venture company as well as impairment losses for certain non-performing stores under the group and an impairment loss of a franchise right.
See also: SATS earnings up 9.1% y-o-y to $70.9 mil for 1QFY2025
As at March 31, the company remains debt-free, with cash and equivalents of $7.9 million, which was a drop from $11.5 million as at March 31, 2024.
As at March 31, Japan Foods directly operated 21 brands across 78 restaurants, down from 84 outlets as at Sept 30, 2024.
Takahashi Kenichi, executive chairman and CEO of Japan Foods calls the FY2025 results a reflection of the difficult operating environment.
"Moving forward, we will continue to execute our turnaround strategy, which includes rationalising our brand portfolio to focus on our more established and proven brands, and not renewing or pre-terminating leases of non-performing outlets," he adds.
Meanwhile, the company expects conditions to be further compounded by ongoing industry challenges, including manpower shortages, rising costs and changing consumer preferences.
"The strong Singapore dollar will also continue to encourage more overseas travel and spend, particularly to Japan," the company says.
Japan Foods shares closed at 22 cents on May 23, up 2.38% for the day, down 34.85% year to date.
