Restaurant Brands International Inc (QSR) has reported a 31.34 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $153.80 million, or $0.36 a share in the quarter, compared with $117.10 million, or $0.24 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $201.40 million, or $0.43 a share compared with $151.60 million or $0.32 a share, a year ago.
Revenue during the quarter grew 5.49 percent to $1,075.70 million from $1,019.70 million in the previous year period. Gross margin for the quarter expanded 150 basis points over the previous year period to 57.70 percent. Total expenses were 60.91 percent of quarterly revenues, down from 66.26 percent for the same period last year. This has led to an improvement of 536 basis points in operating margin to 39.09 percent.
Operating income for the quarter was $420.50 million, compared with $344 million in the previous year period.
Daniel Schwartz, Chief Executive Officer of Restaurant Brands International Inc. commented, "We continued to grow our iconic brands, TIM HORTONS® and BURGER KING®, increasing system-wide sales through restaurant development and focus on guest satisfaction. We are encouraged with the progress this quarter and are excited by the long term growth prospects for our brands."
Operating cash flow falls marginally
Restaurant Brands International has generated cash of $919 million from operating activities during the nine month period, down 3.30 percent or $31.40 million, when compared with the last year period.
Cash flow from investing activities was $19.30 million for the nine month period as against cash outgo of $40 million in the last year period. It has incurred net capital expenditure of $0.10 million on net basis during the nine month period, down 99.85 percent or $65.90 million from year ago period.
The company has spent $436.30 million cash to carry out financing activities during the nine month period as against cash outgo of $1,680.90 million in the last year period.
Cash and cash equivalents stood at $1,274.40 million as on Sep. 30, 2016, up 30.64 percent or $298.90 million from $975.50 million on Sep. 30, 2015.
Working capital increases sharply
Restaurant Brands International has recorded an increase in the working capital over the last year. It stood at $687.30 million as at Sep. 30, 2016, up 61.38 percent or $261.40 million from $425.90 million on Sep. 30, 2015. Current ratio was at 1.58 as on Sep. 30, 2016, up from 1.35 on Sep. 30, 2015.
Cash conversion cycle (CCC) has increased to 12 days for the quarter from 9 days for the last year period. Days sales outstanding went down to 31 days for the quarter compared with 33 days for the same period last year.
Days inventory outstanding has decreased to 17 days for the quarter compared with 36 days for the previous year period. At the same time, days payable outstanding was almost stable at 61 days for the quarter, when compared with the previous year period.
Debt remains almost stable
Total debt of Restaurant Brands International remained almost stable for the quarter at $8,729.30 million, when compared with the last year period. Total debt was 45.48 percent of total assets as on Sep. 30, 2016, compared with 45.90 percent on Sep. 30, 2015. Debt to equity ratio was at 2.48 as on Sep. 30, 2016, down from 2.64 as on Sep. 30, 2015. Interest coverage ratio improved to 3.58 for the quarter from 2.97 for the same period last year.
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