February 26 (SeeNews) - Sphera Franchise Group [BSE:SFG], the manager of KFC, Pizza Hut and Taco Bell brands in Romania, said on Tuesday its net profit rose 4.5% year-on-year to 34 million lei ($8 million/ 7 million euro) in 2018.
The increase was driven by a 4.5% rise in operating profit to 103.2 million lei, Sphera said in a press release.
Sales of Sphera leapt to 771.2 million lei in 2018, up 24.6% compared to the pro forma sales of the previous year. The main driver of the increase was the growth in the sales of KFC Romania by 21.5%, which contributed 16.8pp to the pro forma sales growth rate.
Pro forma operational expenses reached 667.8 million lei in 2018, up 28.5% over 2017. As percentage of sales, operational expenses increased by 2.6pp to 86.6% in 2018, driven mainly by a 1.3pp increase in cost of labour, a 1.1pp rise in other operating expenses and a 0.3pp uptick in the cost of food and materials.
"Sphera’s continued growth across its businesses is hugely encouraging [...] all businesses in Romania, Moldova and Italy have enjoyed growth," SFG CEO Mark Hilton said. "We opened 25 new stores last year, of which 16 are KFC locations across our businesses in Romania and Italy. In Italy we opened 8 stores in the year, from a base of 2 stores at the end of 2017, whilst Taco Bell has more than doubled its store base with 3 units opened during the year to take us to 5 in total, including our first store outside Bucharest, opened in Cluj,"
In the fourth quarter alone, SFG posted a net profit of 1.6 million lei, compared to a 9.4 million lei loss in the same period of 2017.
Shares of Sphera Franchise Group, one of the most important food service operators in Romania, started trading on the BVB in November 2017, following a 285 million lei IPO. The company became the first food service operator listed on the BVB.
Its shares traded 4.76% lower at 19 lei as at 1237 CET on Thursday on the BVB.
(1 euro=4.7617 lei)