Sheng Siong's Q1 profit up 12% on improved revenue, gross margin

SUPERMARKET operator Sheng Siong Group posted a 12.2 per cent jump in net profit to S$14.06 million for the first quarter ended March 31, 2015, from a year ago, on higher revenue and improved gross margin.

Revenue improved nearly 5 per cent to S$198.4 million from S$189.7 million, owing to two new stores - one in Penjuru and the other in Tampines Central - and comparable same-store sales growth.

Earnings per share for the period under review stood at 0.94 Singapore cent, up from 0.91 Singapore cent a year ago.

No dividend was recommended for the period, unchanged from a year ago.

The firm, one of the largest supermarket chains in Singapore, said it began its first quarter with healthy revenue growth over the Chinese New Year season, but this faded in March due to "sluggish post-festive demand", the same tepid conditions which had prevailed in through most of fiscal 2014.

While revenue growth at its Bedok Central store has recovered, growth remained flat at the Tekka store, it said in a statement.

Gross margin increased to 24.4 per cent in the first quarter versus 23.8 per cent in the previous year's corresponding quarter, which the firm attributed to a reduction in input costs derived from the distribution centre.

Sheng Siong said it expects the industry to remain competitive while upward pressure on manpower cost would persist due to the government's restriction on foreign labour supply.