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.
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