Investor Relations

Extracted from Annual Report 2025

Dear Shareholders,

On behalf of the Board of Directors (the “Board”), we would like to present to you the Annual Report of Tung Lok Restaurants (2000) Ltd (“Tung Lok” or the “Group”) for the financial year ended 31 March 2025 (“FY25”).

During the year under review, Singapore’s food and beverage (“F&B”) sector faced rising operating costs, higher rental rates, and intense competition. Despite these challenges, we continued to innovate and roll out novel culinary concepts. We forged a landmark partnership with Mandai Wildlife Reserve with the launch of Singapore’s first and only cave-themed dining destination, Cavern Restaurant, at Rainforest Wild Asia in March 2025.

This latest addition to our restaurant portfolio demonstrates our ability to consistently introducing fresh concepts. By constantly sharpening our competitive edge, we seek to maintain leadership in Singapore’s experiential dining scene.

FINANCIAL REVIEW

The sustained appreciation of the Singapore dollar in FY25 made overseas travel and spending more appealing to local consumers, leading to a moderation in domestic discretionary spending, particularly in the F&B sector.

In parallel, persistent macroeconomic volatility driven by inflationary pressures, interest rate fluctuations, and heightened geopolitical tensions has dampened business sentiment globally. These uncertainties have impacted demand for Meetings, Incentives, Conventions, and Exhibitions (MICE) events in Singapore. As organisations adopt a more cautious approach to corporate budgets and travel commitments, demand for large-scale events and conferences has softened. As a result, the pace of recovery in the catering division has been slower than earlier expectations, posing continued challenges in this segment.

Consequently, the Group’s revenue for FY25 decreased by S$7.9 million or 8.7% to S$82.1 million from S$90.0 million in financial year ended 31 March 2024 (“FY24”), mainly due to the following:

1. S$3.6 million lower revenue contribution from the catering business;
2. S$2.6 million loss of revenue contribution from 5 outlets (3 were closed in FY24 and 2 were closed in FY25); and
3. S$2.0 million lower revenue contribution from existing outlets.

The lower revenue was partially offset by S$0.3 million higher revenue contribution from a new outlet, which was opened in FY25.

In line with the lower revenue, gross profit decreased by S$5.7 million or 9.0% to S$58.9 million in FY25 from S$64.6 million in FY24. Gross profit margin decreased by 0.2 percentage points to 71.7% in FY25 from 71.9% in FY24 due to higher food raw material costs.

Other operating income decreased by S$0.3 million or 11.6% to S$2.5 million in FY25 from S$2.8 million in FY24, mainly due to:

1. S$0.3 million lower catering service income received;
2. S$0.2 million lower marketing promotion funds received;
3. S$0.1 million lower interest income earned; and
4. absence of S$0.1 million reversal of provision for reinstatement cost for an outlet which was closed during FY24.

The decrease in other operating income was partially offset by a S$0.4 million reversal of lease liabilities following the closure of 2 outlets in FY25.

Administrative expenses, mainly manpower-related expenses, decreased by S$0.6 million or 1.8% to S$33.1 million in FY25 from S$33.7 million in FY24, due to a decrease in headcount by 21, following the closure of outlets over FY24 and FY25.

Other operating expenses decreased by S$0.8 million or 2.7% to S$29.0 million in FY25 from S$29.8 million in FY24. The operating expenses which decreased in FY25 include depreciation of property, plant and equipment (S$0.4 million decrease), utilities expenses (S$0.3 million decrease), utensils expenses (S$0.2 million decrease), lease rental expenses (S$0.2 million decrease) and impairment loss of property, plant and equipment (S$0.1 million decrease).

The decrease in other operating expenses was partially offset by S$0.4 million increase in write-off of property, plant and equipment following the closure of 2 outlets in FY25.

Finance costs increased by S$47,000 or 5.7% to S$869,000 in FY25 from S$822,000 in FY24 mainly due to an increase in interest expenses on lease liabilities, driven by higher lease liabilities in FY25.

Share of loss of a joint venture decreased by S$295,000 or 93.1% to S$22,000 in FY25 from S$317,000 in FY24 due to the cessation of business operation of a joint venture during FY25.

Share of profits of associates of S$36,000 in FY25, compared to share of losses of associates of S$88,000 in FY24, was due to net profit contribution from associates in FY25 and the absence of loss on disposal of investment in an unquoted equity recorded by an associate in FY24.

Income tax credit increased by S$28,000 to S$43,000 in FY25 from S$15,000 in FY24, mainly due to higher deferred tax benefits recorded in FY25.

The Group faced subdued demand throughout FY25, particularly in the first half of the year, during which it recorded a loss attributable to owners of the Company of S$2.6 million. This was offset by a profit attributable to owners of the Company of S$0.8 million in the second half of the year, driven by the higher customer traffic during the festive period, particularly during the Chinese New Year period. As a result, the full-year loss attributable to owners of the Company was narrowed to S$1.8 million.

Total assets of the Group decreased by S$2.9 million or 5.2% to S$52.8 million as of 31 March 2025 from S$55.7 million as of 31 March 2024. This was mainly due to a decrease in (i) cash and bank balances of S$2.7 million; (ii) property, plant and equipment of S$1.6 million; and (iii) trade, other receivables and prepayments of S$1.2 million, partially offset by an increase in right-of-use assets of S$2.4 million and an increase in long-term security deposit of S$0.1 million.

Total liabilities of the Group decreased by S$0.3 million or 0.8% to S$39.7 million as of 31 March 2025 from S$40.0 million as of 31 March 2024. This was mainly due to a decrease in (i) bank borrowings of S$1.3 million; (ii) trade and other payables of S$0.8 million; and (iii) income tax payable of S$0.3 million, partially offset by an increase in lease liabilities of S$2.1 million.

The Group’s net working capital decreased by S$2.9 million to S$1.9 million as of 31 March 2025 from S$4.8 million as of 31 March 2024 due to operating loss recorded in FY25 and payment of S$0.6 million dividend to shareholders of the Company.

Net asset value per share as of 31 March 2025 was 4.92 Singapore cents compared to 5.79 Singapore cents as of 31 March 2024. The Group’s gearing ratio increased to 1.91 times as of 31 March 2025 from 1.55 times as of 31 March 2024 mainly due to increased lease liabilities.

OPERATIONS

The Group currently operates a total of 32 outlets. Of these, 21 are directly owned, 3 are held by our associates and 8 others are under license/franchise. These restaurants are spread across Singapore, Indonesia, Japan, Vietnam and the Philippines with our Group’s business predominantly based in Singapore.

We continue to streamline and consolidate the resources of our business units to enhance operational efficiency and long-term sustainability. While we closed 2 outlets in FY25, we also launched Cavern Restaurant, at Rainforest Wild Asia, underscoring our ability to differentiate within the competitive F&B landscape.

The Group has responded to changing market conditions by enhancing research and development efforts and introducing innovative offerings. We are also recalibrating pricing strategies to better meet evolving consumer preferences. In addition, we also strengthened customer engagement through our loyalty programme, Tung Lok First, to build brand connection, encourage repeat visits, and offer personalised rewards that appeals to our customers.

DIVIDENDS

In view of the loss attributable to owners of the Company recorded for FY25, no dividend has been declared or recommended for FY25.

OUTLOOK

The challenging operating environment is expected to persist into the coming year, marked by sustained operating costs pressures, ongoing labour shortages and shifting consumer preferences.

Despite these headwinds, the Group remains firmly committed to strengthening its core business capabilities by fostering innovation, embracing well-considered risks, and proactively identifying and pursuing strategic growth opportunities.

With a strong foundation built on decades-long of operational expertise, Tung Lok is well-positioned to effectively navigate the challenges ahead. We will continue to exercise prudent capital management while approaching expansion opportunities with measured discipline and care.

ACCOLADES

In FY25, the Group’s dedication to operational and culinary excellence yielded remarkable success, as highlighted by the following achievements:

In November 2024, the Group received several accolades at the Meituan Dianping Award 2024:

• Dianping Must-Eat List 2024 – Dancing Crab at Vivo City
• Dianping Popular Business District Store 2024
  • Dancing Crab at VivoCity and Orchard Central
  • Tung Lok Heen at Resorts World Sentosa
  • Tung Lok Peking Duck at Orchard Central
  • Tung Lok Seafood at Orchard Central, Gardens by the Bay and Park Regis by Prince Singapore

Also in November 2024, the Group won the following accolades at the Restaurant Association of Singapore’s Epicurean Star Award 2024:

• Best Healthy Restaurant, Winner – LingZhi Vegetarian
• Best Western Restaurant (Casual Dining), Winner – QĪN Restaurant & Bar
• Best Seafood Restaurant, Winner – Tung Lok Seafood
• Best Seafood Restaurant, Runner-up – Dancing Crab

In March 2025, the Group received award in the “Chinese Cuisine” category at the Top Brand 2025 organized by Influential Brands.

ACKNOWLEDGEMENTS

On behalf of the Board, we extend our heartfelt gratitude to all our customers, bankers, business associates, partners, and shareholders for their enduring trust and loyal support.

We also sincerely appreciate our Board members for their wise counsel. Our deepest gratitude goes to the management team and all employees for their dedication and tireless efforts. Through their commitment to pursuing excellence and providing unwavering service to our customers, the Group has been able to navigate challenges and remains well-positioned for the years ahead.

Date: 26 June 2025