August 30 (SeeNews) - Romanian fast food chain Sphera Franchise Group [BSE:SFG] reported on Tuesday a net loss of 8.6 million lei ($1.75 million/ 1.76 million euro) for the first half of 2022, compared to a net profit of 5.2 million lei in the same period of 2021.
Sphera's operating profit (EBITDA) fell by an annual 29% in the first half of 2022, to 21.2 million lei, the company said in a press release.
The group's sales rose by an annual 36% in the first half of the year to 606 million lei. Sales on the Romanian market rose by 33% year-on-year, sales in Moldova increased by 34%, while sales in Italy were 64% higher.
The group ended the second quarter of 2022 with a positive result, registering EBITDA of 17.5 million lei (1% increase compared to the like period of last year 2021) and a net profit of 2.2 million lei (a 54% decrease compared to the second quarter of 2021). The decrease in net profit in the second quarter of this year 2022 was due
to the inflationary pressures on the cost side, growing energy prices resulting from the war in Ukraine, and a less favourable context than in the like period of 2021, which helped lift the bottom line, the company explained.
"The excellent top-line performance and positive bottom line in the second quarter helped recover part of the losses we registered in a difficult first quarter of this year. Despite continuous challenges caused by the inflation, we have managed to successfully offset part of restaurant expenses in Q2 of this year, as their shares in total sales decreased from 98%, as registered in Q1 2022, to 95%," Sphera Franchise Group CFO Valentin Budes said.
Sphera also said it will continue its efforts to improve the bottom-line performance through strict cost-control measures across the group for the remainder of the year to address further challenges due to increasing foodstuff prices, growing energy costs, salary increases, and the general inflationary environment.
Sphera Franchise Group operates a total of 174 KFC, Pizza Hut and Taco Bell restaurants in the Romanian, Italian, and Moldovan markets. The group is staffed by over 5,230 employees.
In 2021, Sphera swung to a net profit of 27.4 million lei, from a 2.37 million lei net loss in the previous year.
Blue-chip Sphera Franchise Group shares traded 2.32% lower at 12.65 lei as of 1342 CET on Tuesday on the Bucharest Stock Exchange.
(1 euro = 4.8652 Romanian lei)