Cafe de Coral posts 87% earnings slump, plans to seek rent relief
The operator also plans to trim its workforce amidst the viral outbreak.
Cafe de Coral Holdings is set to reduce its workforce costs and restructure rental leases as the COVID-19 pandemic severely hits its earnings.
In an exchange filing, profit for the operator fell 87% to HK$73.6 million (US$9.6 million) for the 12 months ending 31 March, from HK$570 million a year earlier.
Aside from scraping its dividend to preserve cash, Cafe de Coral said it has taken measures to “tighten operational expenses” by cutting on manpower cost, negotiating with the landlords to lower rents, and shifting to online food ordering and delivery.
The company also disclosed that it received HK$60.28 million in subsidy from the government in 2020. Hong Kong’s government has launched several subsidy schemes, ranging from HK$250,000 to HK$2.2 million in May that would benefit 16,000 catering outlets and their employees.
The operator’s China business shrank by 5.4% but expects to rebound when sentiment recovers. Prior to the outbreak, all its 114 stores in China had generated growing revenues.
“Despite the dark clouds currently hovering over the global economy, I remain resolutely positive about the Group’s long-term prospects,” Chairman Sunny Lo Hoi-kwong said.
