Sapphire Foods on Friday announced its third quarter results for the financial year 2023-24 with profit at Rs 9.83 crore, down 69.9 per cent in comparison to Rs 32.70 crore during the third quarter of FY23. The company that operates KFC and Pizza Hut restaurants in India and Sri Lanka, posted revenue from operations at Rs 665.56 crore, up 11.6 per cent as against Rs 596.13 crore during the corresponding quarter of last year. The company EBITDA stood at Rs 121.6 crore, up 4.3 per cent on-year.
During the third quarter, the company said that it added 36 restaurants, which included 25 KFC, 8 Pizza Hut in India and 3 Pizza Hut in Sri Lanka, taking the total restaurant count to 850.
“In a weak consumer sentiment scenario, Sapphire KFC continued to perform well. It delivered another quarter of robust performance with restaurant sales growth of 16 per cent YoY (-2 per cent SSSG) and restaurant EBITDA at 20.1 per cent (10 bps YoY). Our 9M restaurant EBITDA of 20.0 per cent ( 50 bps YoY) is highest ever, coming on the back of healthy 19 per cent sales growth. We are on track to double the restaurant count in ~3 years,” the company said in a statement.
Pizza Hut, it added, had another challenging quarter. Restaurant sales declined by 4 per cent YoY (-19 per cent SSSG) as the overall environment remains difficult for the Pizza category. Operating deleverage arising out of negative SSSG impacted restaurant EBITDA, which came at 4.6 per cent ( 950 bps YoY). “Revival of this key brand in Sapphire’s portfolio will require persistent execution (product innovation and building consumption occasions) with enhanced marketing investments over medium term (update laid out in the subsequent slides). We are being cautious on our restaurant expansion approach,” the company said.
Sri Lanka restaurant sales grew by 7 per cent in LKR ( 22 per cent in Rs terms) while SSSG was 1 per cent. Restaurant EBITDA margins were at 14.2 per cent ( 40 bps YoY), up by 4 per cent in LKR terms, as the macro economic recovery of the country continues.