Sakae Holdings warns of full-year loss due to S$3.2 million impairment charge
The loss is largely due to a ‘goodwill impairment of S$3.2 million in connection with the purchase of 51% equity interest in Cocosa Export’, said Sakae.
Restaurant chain owner Sakae Holdings on Friday (August 23, 2019) issued a profit guidance for the group and its subsidiaries for the financial year ended June 30, 2019, mostly due to an impairment of S$3.2 million from the purchase of more than half in the stake of Cocosa Export in equity interest.
The loss is largely due to a ‘goodwill impairment of S$3.2 million in connection with the purchase of 51% equity interest in Cocosa Export’, said Sakae. ‘Along with this, there is an approximate impairment loss of S$2.8 million under other receivables associated with the group’s investment in Cososa Export and related entities,’ the group added.
Cocosa Export is a Chilean frozen seafood production and trading company which Sakae had acquired a stake in March 2016.
Sakae’s share price was unchanged after the announcement was made late Thursday, at S$0.085. Year-to-date, Sakae’s shares have tanked 0.43% lower, compared to S$0.15 on January 7, 2019.
The Singapore-headquartered restaurant owner known for its the sushi conveyer belt concept closed more than 10 of its 46 Sakae Sushi outlets locally last year, due to challenging operational headwinds.
The evolving landscape of malls replacing retailers with food and beverage operators have led to intense competition for Sakae due to a saturated market. High rental fees and staff costs also added to the strain.
Founder and executive chairman of Sakae Holdings Douglas Foo was also in a 6-year legal battle against a former Sakae director who he accused of breaching his fiduciary duties, according to Channel News Asia. The legal dispute cost about S$10 million and impacted the group’s operations, according to Foo.
On June 5, the group announced that it has been added on the Singapore Exchange watchlist for not meeting the minimum trading price requirements.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
