Cara Operations, which operates Canadian fastfood chains Harvey’s and Swiss Chalet and also supplies food to airlines, has reported a fall in quarterly profit due to the outbreak of SARS in the Toronto area.

Toronto-based Cara posted earnings of C$5.7m (US$4.08m) for the first quarter to 22 June, compared to $28.6m a year earlier.

Sales for the quarter were $264m, compared with $248.7m in the year-ago period.

"Given the significant uncertainty surrounding the travel and hospitality industry, we expect the next few months to remain relatively soft, but remain optimistic that market conditions will improve in the second half of the year," the company was quoted by Reuters as saying.

The company’s profits have been hit by the outbreak of SARS (Severe Acute Respiratory Syndrome), which reduced travel to and from Toronto, Cara’s main restaurant market. Cara also suffered when Air Canada, one of the company’s main clients, filed for bankruptcy protection in the spring.