Super Group's Q3 net profit nearly halved

SUPER Group reported a 47 per cent slide year on year in net profit to S$9.98 million for the third quarter ended Sept 30 as revenue and margins declined.

Revenue edged 3 per cent downwards to S$129.5 million due to lower branded consumer sales, while earnings per share for the quarter worked out to 0.89 Singapore cent, down from 1.68 cents previously.

Branded consumer sales were down 6 per cent to S$82.03 million on the back of lower sales in Singapore, China and the Philippines. Food ingredients sales on the other hand were up 3 per cent to S$4s7.48 million.

Operating profit slumped 45 per cent to S$12 million due to lower sales revenue and gross profit margin. The group said that gross profit margin slipped five percentage points to 32 per cent of sales revenue owing to higher raw material costs, and a higher proportion of sales from its food ingredients business, which has lower margins.

"The group sees a gradual recovery in certain core markets within the branded consumer segment as it moves into 4Q14 and beyond," Super said. "In the food ingredients segment, the group's long term strategy is to diversify geographically and move into higher margin products."

It went on to say that market conditions will remain competitive while raw material costs and regional currency fluctuations will impact operating performance. However, management is exploring options to reduce exposure to such fluctuations, it added.