Qsr Secures Kfc Franchise In Cambodia

KUALA LUMPUR (Friday, August 31, 2007) - QSR Brands Bhd has secured the KFC franchise from Yum! Restaurants Asia Pte Ltd to operate the fast food chain in Cambodia after obtaining the latter's approval in principle, and may expand the Pizza Hut and Ayamas brands to that country in the future.

It will operate the business there with two partners Cambodia-based Royal Group of Companies Ltd (RGC) and Hong Kong-incorporated Rightlink Corporation Ltd (RCL). QSR will hold a 55% stake in the proposed joint venture, while RGC and RCL will have 35% and 10%, respectively.

RGC is one of the largest conglomerates in Cambodia with a substantial investment in media, telecommunications, banking, education, property development and trading businesses.

Speaking to reporters at a briefing here yesterday, QSR's chairman Tan Sri Mohammad Ali Hashim said it would make an initial investment of about US$3 million (RM10.5 million) to set up four KFC outlets in Phnom Penh and other major towns, with the first to be set up in the capital city by year-end.

"We are the first western fast food restaurant to open in Cambodia," he said, "Other outlets in the city will be rolled out in stages at a rate of around two new stores per year, and subsequent expansion will be in other populous cities such as Siem Reap and Sihanoukville," Mohammad said.

Asked on earnings expectations from the investment, Mohammad said the group was hopeful that Cambodia, which has a population of 14 million, would contribute profitably in the first year. Presently, overseas operations, namely Singapore and Brunei, contribute about 15% to QSR's revenue.

He said if the venture proved to be successful, the group would consider expanding the Pizza Hut and Ayamas brands to Cambodia as well.

Meanwhile, QSR announced that it posted a 19.32% rise in net profit to RM15.07 million for the second quarter ended June 30, 2007 from RM12.63 million a year ago on the back of a stronger revenue.

Revenue was higher at RM109.61 million, compared with RM103.68 million in the previous corresponding period, due to the company's network expansion including the opening of 10 new Pizza Hut outlets in the first half of the year. Earnings per share were 6.14 sen and the company has declared an interim dividend of 4 sen less tax.

For the first half of 2007, the company's net profit rose 15.34% to RM28.35 million on a 5% rise in revenue to RM213.41 million. Earnings per share were 11.55 sen.

"The launch of our highly successful Sensasi Delight Combo value meals in June also boosted performance in Malaysia," Mohammad said at the media briefing.

He said Singapore operations also showed improvements with higher pre-tax profit of RM3.5 million in the first six months due to the successful launches of its Double Sensations, Fortune Chinese New Year Pizza and American Superstars Pizza promotions.

He added that the introduction of new products such as Crispy Thin Pizza and Pasta Perfetto also contributed to the improved performance.

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