YKGI Limited FY2025 Financial Analysis: Growth Amid Cost Pressures

YKGI Limited, a Singapore-based F&B and food court operator, released its unaudited condensed interim financial statements for the full year ended 31 December 2025. The Group reported revenue growth across all business segments, though margins were pressured by rising costs, particularly labour and lease expenses. Below, we present a structured analysis of key metrics, performance trends, corporate actions, and management commentary for investors.

Key Financial Metrics & YoY / QoQ Comparisons

Historical Performance & Trends

• Full-year revenue rose to S\$70.1 million (+6.6% YoY), driven by expansion in F&B operations, food court openings (notably Suntec City), and new franchise outlets in Macau.
• Net profit fell to S\$3.9 million (-17.9% YoY), with EPS dropping to 0.91 cents versus 1.12 cents in FY2024, as higher labour and lease costs offset revenue gains.
• Depreciation and finance costs saw significant increases (+22.7% and +26.5% YoY respectively), attributed to new outlets and lease renewals.
• Cash and bank balances remained stable at S\$21.4 million, despite significant capital expenditure and dividend payouts.

Dividends

• Final dividend for FY2025: 0.36 Singapore cents per share (subject to AGM approval), up from 0.26 Singapore cents in FY2024.
• Interim dividend for FY2025: 0.36 Singapore cents per share, unchanged from FY2024.
• All dividends are tax-exempt.

Chairman’s Statement & Management Tone

“Singapore’s food and beverage (‘F&B’) industry continues to face a challenging operating environment. Labour shortages remain a key constraint, affecting efficiency across the sector. Businesses have responded by optimising manpower deployment, adjusting operating hours and enhancing productivity. Despite higher wages and improved employment terms, recruitment remains competitive amid tight local labour conditions and foreign worker policy restrictions, with the Progressive Wage Model contributing to structurally higher labour costs. At the same time, rising operating expenses — including rent, utilities and raw materials — continue to pressure margins. Global uncertainties, trade tensions and inflationary pressures have increased cost volatility and may weigh on consumer confidence and discretionary spending. In response, the Group remains focused on disciplined cost control and operational efficiency. It continues to review its outlet portfolio, closing underperforming outlets while securing more strategic locations to enhance overall profitability. Initiatives to improve gross margins include strengthening procurement strategies, driving cost optimisation and enhancing operational processes, while leveraging scale and centralised functions to improve productivity and maintain quality standards. The Group remains committed to sustainable long-term growth… Looking ahead, while competitive conditions and cost pressures are expected to persist, the Group will continue to enhance its diversified business model and operational capabilities, remaining agile in adapting to market developments. Through prudent management and disciplined execution, the Group aims to reinforce resilience and deliver sustainable growth in the next reporting period and over the next 12 months.”

The tone is cautious but focused on operational discipline, portfolio rationalization, and strategic expansion.

Corporate Actions & Events

• Share Buybacks: Acquisition of 3.8 million treasury shares in FY2025.
• Expansion: Opening of Suntec City food court and second CHICHA San Chen outlet in Macau.
• Acquisition: Increased stake in Yew Kee Group International (Macau) Limited from 90% to 95%.
• IPO Funds: S\$12M raised, with S\$4.56M used for expansion and S\$2.04M for working capital. S\$5.44M remains unutilized.

Directors’ Remuneration

• Total key management compensation: S\$2.43 million in FY2025 (S\$2.51 million in FY2024), including salaries, contributions, and benefits like lease payments for vehicles.

Cash Flow, Asset & Liability Developments

• Operating cash flow: Strong at S\$17.4 million; investing cash outflow of S\$3.4 million; financing cash outflow of S\$13.9 million due to lease repayments, dividends, and treasury share purchases.
• Lease Liabilities: Significant increase due to new and renewed leases (total lease liabilities rose by S\$15.6 million).
• Asset Base: Property, plant, and equipment increased by S\$16 million, mostly from right-of-use assets.

Material Factors Affecting Performance

• Labour shortages and rising wage costs, especially due to the Progressive Wage Model.
• Cost pressures from rent, utilities, and raw materials amid global uncertainty.
• New outlet openings contributed to revenue but incurred initial losses as operations stabilized.
• No significant legal, regulatory, or exceptional items disclosed.

Outlook & Forecasted Events

• Management expects continued margin pressure from costs but remains committed to disciplined expansion and cost optimization.
• Focus on closing underperforming outlets and expanding in strategic locations.
• Plans to broaden product offerings and pursue new brands and partnerships.

Conclusion & Investment Recommendations

Overall Performance: YKGI Limited delivered solid revenue growth and maintained strong cash flows, but profitability was constrained by rising costs, particularly in labour and lease expenses. Management’s cautious outlook and continued investment in operational efficiency and expansion signal resilience but not immediate margin recovery.

If you currently hold YKGI shares: Consider holding your position. The Group is executing on strategic expansion and cost discipline, and the dividend yield has improved. However, monitor profitability trends closely, as further margin compression could affect valuations.

If you do not hold YKGI shares: Consider waiting for greater clarity on margin stabilization or signs of improved profitability, especially as new outlets ramp up. The business is fundamentally solid, but cost pressures and sector headwinds persist.

Disclaimer: This article is based strictly on the company’s disclosed financial statements and management commentary. It is not a solicitation to buy or sell securities. Investors should conduct their own research and consult a financial advisor before making investment decisions.

View YKGI Historical chart here