Operating profits at the Irish unit of the McDonald's fast food group fell by almost 30 per cent last year to €7.83 million.
The fall in profits was disclosed as the group makes new efforts to counter mounting concern about the role of fatty food in fostering obesity with the announcement this week that it will put "easy to understand" nutrition guides on its food packaging from next year.
McDonald's sales have fallen drastically in some markets, as consumers turn to healthier food. However, the company said its Irish restaurant sales actually increased last year.
It blamed the fall in profits on lower income from franchise fees, rising business costs and a €1.8 million impairment charge to pay the cost of closing down a small number of unviable restaurants.
In accounts to be filed today with the Companies Office, McDonald's Restaurants of Ireland Ltd reports that its turnover fell last year to €70.62 million from €71.34 million.
Operating profits of €7.83 million were down from €11.12 million and pretax profits fell to €7.27 million from €9.67 million.
The turnover figure includes fees from some 50 franchise restaurants and sales at 20 company-owned restaurants.
"The decline in turnover year on year simply represents less franschising activity between 2004 and 2003. The underlying core of the business, which is the sales of food and drink in our restaurants is up in the same period," said finance director Adrian Crean.
Sales at the 70 restaurants rose by "just under 2 per cent" to around €155 million with a profit margin of between 3 and 5 per cent, he said.
"We'd expect that growth to continue into 2005... On a going forward basis, we'll certainly be predicting profitable growth."
He said that five new restaurants were opening this year, but added that "two to three-ish" restaurants in unspecified provincial locations would be closed down and replaced nearby with newer outlets.
