Flat Sales, Falling Profits: 5 Key Insights from Old Chang Kee’s Latest Financials

For anyone in Singapore, Old Chang Kee’s curry puffs are an iconic, comforting presence. But behind the familiar snack is a classic business challenge revealed in its latest half-year report. While the top line held steady, a pincer movement of rising costs is squeezing profits.

This post looks beyond the headline numbers from the six months ending September 30, 2025. We’ll explore how this profit squeeze is happening, why the company’s powerful cash flow provides a crucial buffer, and how its strategic response is shaped by its overwhelming reliance on the Singaporean market. Here are five interconnected insights that tell the real story.

1. Revenue is Flat, But a Key Shift is Underway

The top-line revenue figure suggests business as usual, but the details signal a critical evolution in how customers engage with the brand.

Total revenue barely moved, increasing by only 0.2% to S$51.9 million. However, this stability masks a changing dynamic. Revenue from the company’s core retail outlets grew by just 0.1%, while non-retail sales—which include delivery, corporate catering, and events—saw a 1.0% increase.

This analysis reveals that the non-retail segment is growing ten times faster than the traditional retail channel. While small in absolute terms, this highlights the strategic importance of diversifying away from pure walk-in traffic and building out its business-to-business (B2B) and delivery capabilities.

2. The Bottom Line is Under Pressure from Rising Costs

While sales held steady, rising costs put significant pressure on profitability, revealing the true challenge facing the company.

The most significant number in the report is the 19.3% drop in profit before tax, which fell to S$6.08 million. This decline wasn’t caused by fewer sales but by a classic profit squeeze, where the costs of doing business are rising faster than revenue. The report identifies three main drivers:

• Higher food costs and production staff expenses, which caused the company’s gross profit margin to decline slightly to 69.3%.
• Increased “Selling and distribution expenses”, which rose by 4.0%, driven by annual wage adjustments and higher local starting salaries.
• Higher “Administrative expenses”, which climbed 3.0%, partly due to increased bank fees from the growing volume of digital payments.

This three-pronged cost pressure is the primary reason why the company’s strategic focus, discussed later, is so heavily on “rigorous cost management.” This pressure on profits makes the company’s cash position, our next takeaway, all the more critical.

3. Despite Lower Profits, The Company is a Powerful Cash Machine

In a counter-intuitive finding, even as accounting profits fell, the company’s cash reserves grew, pointing to exceptional operational health.

The Group’s cash and bank balances increased by S1.2 million, reaching a very healthy S53.7 million. It’s a textbook example of how accounting profit doesn’t tell the whole story. The company generated approximately S10.2 million in net cash from its core operating activities on just S6.08 million in pre-tax profit, demonstrating exceptional working capital management and operational efficiency.

This strong cash-generating ability provides significant financial resilience, giving the company ample resources to navigate challenges, invest, and pay dividends. This financial strength is essential, as it provides the resources to navigate challenges in what is almost exclusively a single market.

4. Success is Hyper-Concentrated in the Singapore Market

A breakdown of the numbers reveals that Old Chang Kee’s financial performance is both a testament to its local dominance and a highlight of its biggest strategic risk.

The geographical breakdown of revenue is stark. Of the S51.9 million in total revenue, a massive S51.8 million came from its Singapore operations.

The complete collapse of its Australian revenue—from S169,000 in the previous year to zero in this period—illustrates the immense difficulty of international expansion for the brand. Meanwhile, revenue from Malaysia was just S155,000. For a brand with international recognition, its financial success remains almost entirely dependent on its home market.

5. Leadership Has a Clear-Eyed View of the Challenges Ahead

The company’s management is not ignoring the difficult operating environment and has articulated a clear strategy in response.

The report’s commentary section does not downplay the headwinds. It provides a direct assessment of the pressures facing the business:

The Group is observing sustained pressure across its cost base, with notable increases in raw material costs, wages and rental expenses. Simultaneously, the structural manpower deficit within the retail industry continues to present a significant operational hurdle, compounded by a period of moderated retail consumer demand in the near term.

In response, the Group’s priorities include rigorous cost management, growing its B2B sales channels, and expanding its retail footprint into high-value locations like transport hubs.

Conclusion: Resilience in the Face of Headwinds

A quick glance at Old Chang Kee’s financials shows a simple story of falling profits. But a deeper look reveals a more nuanced picture of a resilient company using its operational strengths to navigate a tough environment. While significant cost pressures are undeniable, the business remains a formidable cash-generating machine with a clear strategy for the future.

The financials show a resilient, cash-rich company facing undeniable headwinds in its core market. The crucial question is whether its strategic pivot towards B2B and high-value locations can outpace the rising costs that are squeezing its iconic, low-cost offerings.

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