Westlife Development reported a consolidated net loss of Rs 27.43 crore in Q2 FY21 compared with net profit of Rs 12.91 crore in Q2 FY20.
Total revenues during the July-September quarter declined by 47.1% to Rs 20.95 crore. The company reported an operating EBITDA loss of Rs 10.22 crore in Q2 September 2020 as compared a operating EBITDA profit of Rs 41.01 crore in Q2 September 2019. It reported a negative EBITDA margin of 4.9% in Q2 FY21 as against a positive EBITDA margin of 10.3% in Q2 FY20.
Pre-tax loss in the second quarter was at Rs 36.64 crore as compared to a pre-tax profit of Rs 18.07 crore in the corresponding period last year. The company wrote back deferred taxes worth Rs 9.21 crore during the quarter.
In the quarter under review, the company reported strong sales recovery led by its convenience channels that include delivery, take-out, drive-thru and on-the-go. Sales through these convenience channels zoomed back to their pre-COVID levels in September, while in-store started showing healthy recovery trend as the Government started unlocking markets in a phased manner. As a result, the company more than doubled its overall sales over Q1FY21, achieving close to 70% of pre-COVID levels. This was despite Maharashtra -the state that has close to 50% restaurants of the company - remaining shut for dine-in.
The company saw the pace of recovery across its operations accelerate, with recovery rate progressively increasing by 7-10% every month. Stores that were open for dine-in for more than five months came close to pre-COVID levels, with those that opened up recently recovering twice as fast.
The sales recovery was well-supported by the company's strong cost management. Westlife Development's focus on rationalizing costs and maximizing efficiencies across operations enabled it to bring down costs, even as the revenues increased. This helped improve margins and operating EBITDA significantly with the company achieving break-even operating EBIDTA in September 2020.
Commenting on the financial results for the quarter ended 30 September 2020, Amit Jatia, vice chairman of Westlife Development, said "I am happy to share that we have effectively steered this crisis and have got the business on a strong recovery track this quarter. Our strong financial foundation combined with a focus on accelerating our omni-channel strategy is reaping great results for us. We look forward to the opportunities that lie ahead and are motivated by the recovery in business that we have seen in this quarter. I am confident that we will soon be back on our growth path."
Westlife Development (WDL) focuses on setting up and operating quick service restaurants (QSR) in India through its subsidiary Hardcastle Restaurants (HRPL). The company operates a chain of McDonald's restaurants in West and South India, having a master franchisee relationship with McDonald's Corporation USA, through the latter's Indian subsidiary.
The scrip ended almost flat at Rs 371.45 on the BSE on Friday. It traded in the range of 368.80 and 385 during the day.
On a year-to-date (YTD) basis, the stock has gained 8.41% while the benchmark S&P BSE Sensex rose 1.55% during the same period.
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