Hong Kong-listed restaurant chain Cafe de Coral has posted a drop in profit for the fiscal first half, which management attributed to adverse market conditions.

For the six months ended September 30, profit attributable to shareholders fell 28.2 per cent to HK$144 million (US$18.5 million). The group flagged the decline in its profit warning earlier this month.

Revenue decreased 1.2 per cent to HK$4.26 billion, including 1.2 per cent decline in Hong Kong and 1.5 per cent drop with Mainland China.

Management said the period was marked by a sluggish economy in both Hong Kong and Mainland China, coupled with increasing outbound spending, weak consumption and fierce price competition.

“These effects caused a severe and unexpected downturn in the restaurant business and impacted the group’s results, in addition to a high base effect following strong sales recovery resulting from the lifting of pandemic-related restrictions in the corresponding period last year,” the group stated.

As of September 30, Cafe de Coral had 381 stores in Hong Kong and 176 locations in Mainland China.