Conference Call with Sapphire Foods India Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Restaurants company Sapphire Foods India announced Q2FY25 results Our Q2 FY25 Consolidatedidated Restaurant Sales (Rs 6,940 million) grew by 8% with EBITDA (Rs1,152 million) at 16.6%. Demand conditions continued to be muted. In Q2 FY25 we added 19 KFC, 3 Pizza Hut in India & 1 Pizza Hut in Sri Lanka. Sapphire Foods total restaurant count is 909 as on 30th Sep 24. Consolidated Restaurant EBITDA declined by 8% YoY, and margin was at 13.7% (down by 240 bps) Consolidated EBITDA (Rs 1,152 million, 16.6%) declined YoY by 1% (down by 160 bps) | Consolidated Adj. EBITDA (Rs 590 million, 8.5%) declined YoY by 13% (down by 210 bps). Consolidated PBT before exceptional items (Rs53 million, 0.8%) | Consolidated Adj. PBT before exceptional items (Rs 143 million, 2.1%). Sapphire KFC grew restaurant sales by 9% YoY (SSSG -8%). Q2 is generally a soft quarter for Sapphire KFC owing to the number of vegetarian-only festival days and this year we have seen a greater impact in sales during such days. Owing to deleverage, Restaurant EBITDA came at 16.5% (down by 270 bps YoY). Our recipe for SSSG revival revolves around increasing occasions of consumption through value & product innovations (Chicken Rolls variants, Zinger Burger variants, Snackers), focus on day parts (lunch, late night, Wednesdays) and driving value across individual and group meal occasions. After seeing a 17% sequential QoQ upliftment in Average Daily Sales (ADS) in Q1, Pizza Hut ADS has remained stable in Q2. Restaurant Sales increased by 3% YoY (SSSG - 3%). Our Rest. EBITDA is at 4.1% post additional marketing investments. In line with brand revival strategy, we increased marketing investments behind Melts from Apr-Sep and have now launched in October the exciting Momo Mia range of pizzas and appetizers. Recovery of Sri Lanka business continues with both sales & profit improvement. Restaurant Sales grew by 10% in LKR (19% in Rs terms) while SSSG was 9% and Restaurant EBITDA margins were at 15.5% (up by 20 bps YoY). Maldives business (2 KFC & Pizza Hut each, ~ 0.4% of overall revenue) has struggled for the past 1 year and sales is down by 57% YoY due to continuing geopolitical situation. This has resulted in the business incurring losses and hence as a prudent approach, we have taken an impairment (non-cash) of Rs 114 million in Q2FY25 as an exceptional item in Consolidatedidated Financials. Result PDF