Friday, August 31, 2007

KFC is coming to Cambodia

Malaysia's QSR to open KFC outlet in Cambodia

KUALA LUMPUR: QSR Brands Bhd is expanding its restaurant business under the KFC brand into Cambodia.

The first outlet was expected to be operational in Phnom Penh by year's end, chairman Tan Sri Muhammad Ali Hashim told a press conference yesterday.

The group initially plans to open four outlets in the capital city as well as other major towns, and thereafter open two new restaurants each year.

The expansion into Cambodia involves the setting up of a joint-venture company with two local partners, Royal Group of Companies Ltd and Rightlink Corp Ltd. QSR will hold 55% while Royal Group and Rightlink will have 35% and 10% respectively.

QSR's initial investment is about US$3mil, which will be funded internally.

From left: QSR Brands Bhd managing director Jamaludin Md Ali, chairman Tan Sri Muhammad Ali Hashim and deputy chairman Ahamad Mohamad at the press conference in Kuala Lumpur on Thursday
The group is hopeful the Cambodia operations would contribute to profits in the first year. “Many people prefer to eat white meat,” Ali said, adding that the country had a population of more than 14 million.

At present, the group's overseas operations, namely in Singapore and Brunei, contribute about 15% of revenue.

If the latest venture proved to be successful, the group would consider expanding the Pizza Hut and Ayamas brands to Cambodia as well, Ali said, adding that KFC had yet to have a presence in Myanmar and Laos.

Meanwhile, for the first half ended June 30, QSR reported an 8.1% growth in pre-tax profit to RM31.9mil owing to new product offerings, increase in the number of outlets and better performance at associate KFC Holdings (M) Bhd (KFCH).

The group opened 10 new Pizza Hut outlets in the first six months. Its Singapore business saw a 61.7% jump in pre-tax profit to RM3.5mil in the first half from RM2.2mil a year earlier.

Revenue rose 5.1% to RM213.4mil compared with RM203.1mil in the previous corresponding period while earnings per share (EPS) improved to 11.55 sen from 10.22 sen.

QSR declared an interim gross dividend of four sen per share for the second quarter.

KFCH, meanwhile, posted a 10.4% surge in pre-tax profit for the six months ended June 30 to RM67.1mil from RM60.8mil a year earlier. Revenue grew 11.7% to RM808.4mil against RM723.8mil previously while EPS improved to 23.37 sen from 21 sen.

Revenue at KFC restaurants expanded 12.2% to RM620.3mil while that at its integrated poultry division increased 9.7% to RM149.4mil.

“In Malaysia, 24 new restaurants were opened in the first half and 13 existing restaurants were remodelled during the second quarter,” said Ali, who is also chairman of KFCH.

Revenue from the KFC chain in Singapore grew 92% to RM5mil during the first six months from RM2.6mil previously while its Brunei business turned around with a pre-tax profit of RM368,000 from a loss of RM68,000.

Nonetheless, the profits were partially affected by higher costs of commodities like corn, soybean meal and palm oil, which led to higher costs of poultry products.

KFCH proposed an interim gross dividend of eight sen per share for the second quarter.

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