Casual dining restaurant group Max’s Group, Inc. (MGI) returned to profitability in the first quarter due to a one-time gain from a property sale, which helped offset the 29% drop in system-wide sales as dine-in operations remain restricted amid the pandemic.
In a regulatory filing, MGI reported a P335.98 million attributable net income in the January to March period, a turnaround from the P168.51 million net loss a year ago when the government began implementing strict quarantine measures amid the coronavirus pandemic.
Excluding a P315 million gain from the sale of a subsidiary whose sole asset is land, MGI said the first quarter net loss is at P18 million.
System-wide sales, which include sales of company-owned and franchised stores, fell by an annual 29% to P2.84 billion. MGI noted that restaurants were only allowed to have 50% dine-in operations during the general community quarantine (GCQ) for most of the first quarter. All dine-in operations were prohibited when the enhanced community quarantine was implemented in the third week of March.
“Said restrictions effectively caused a 34% reduction in transaction count due to the restrictions in place this quarter which were not yet in place for most of Q1 2020,” the company said.
MGI, which operates brands such as Max’s and Pancake House, noted that dine-in operations have already been recovering before the ECQ.
“This signals increased market demand and upside growth potential once the country is place back to more relaxed restrictions especially for more traditionally dine-in brands like Max’s and Pancake house. Delivery channel and takeout are still stable contributing a major portion of the Company’s total revenue. The delivery business is and will be a vital part of the Company’s growth,” it noted.
Consolidated revenues dropped by 32% to P1.84 billion.
Operating income stood at P145 million, a 353% increase from a year ago, which MGI attributed to “pivots in business models done throughout the pandemic.
“Our total first-quarter costs and expenses of P1.69 billion stand at 61% versus where we were last year, as opposed to our 68% revenue index. The fact that we were able to generate positive operating income even as we support the national government’s nuanced approach to community quarantines is a testament to how our operating model is built to organically survive and succeed in this evolving business landscape,” MGI President and Chief Executive Officer Robert Ramon F. Trota said in a separate statement.
As of end March, MGI’s store count stood at 667 branches, down from 759 stores in the same period last year.
