Fairwood’s annual profit doubles due to government subsidies

Hong Kong’s second largest fast food chain Fairwood Holding Ltd (00052) reported net profit attributable to shareholders of HK$153.6 million in the financial year ended Mar 31, 2021, more than doubled from a year ago due to government subsidies.

This was 152.4% above its yearly net profit of HK$60.9 million the previous year. However, its annual revenue dropped 12.7% to HK$2.65 billion under COVID-19.

Shares of the company rose about 1% to close at HK$18 after the results were announced while the Hang Seng Index lost 0.97% to 28,983.89.

Basic earnings per share of the company increased 152.2% to 118.59 HK cents, from 47.03 HK cents a year ago, it said in a statement.

Fairwood, which operated fast food restaurants, institutional catering and property businesses, said mandatory social distancing policies and restricted opening hours for restaurants led to a significant reduction in restaurant patronage during the reported period. However, the increase in take-away services offset part of the loss in revenue.

Businesses in mainland China were also affected with same-store sales down by nearly 27% in local currency.

But the company was optimistic that its businesses in Hong Kong will recover as the pandemic is kept under control, and it will continue to expand in the mainland. With the completion of a bakery production line in April this year, the company would offer various bakery products and reduce costs, it said.