Dairy Farm posts 5.2% rise in FY18 underlying net profit, but incurs US$453m restructuring charge

UNDERLYING FY18 net profit for supermarket and convenience store retailer Dairy Farm International Holdings increased 5.2 per cent to US$424 million from the preceding year, the group said in a Singapore Exchange filing on Thursday.

But the group also incurred a one-off non-trading after-tax and non-controlling interests charge of US$453 million as it restructured its South-east Asia food business, offset by a net gain of US$121 million principally in relation to business and property disposals.

That contributed to net profit falling to US$92 million for the year, compared with US$402 million in 2017.

Revenue expanded 4.1 per cent to US$11.75 billion from the previous year.

It reported lower sales and profit in its Supermarket and Hypermarket business as trading worsened in South-east Asia and Hong Kong.

The group said: "Market competition is intensifying in all key markets, providing customers with more choice, competitive prices, and greater location convenience. These changes have impacted the business significantly and at an increasing rate."

The Convenience store business booked higher sales and profit, while sales and profit for Health and Beauty showed double-digit growth.

For Home Furnishings, IKEA delivered strong sales growth in all its markets.

Underlying earnings per share crept up to 31.37 US cents from 29.77 US cents in the preceding year.

The board is recommending an unchanged final dividend of US$14.50 cents per share, which translates to a total annual dividend of 21 US cents per share.

Chairman Ben Keswick said: "With a more customer-focused and market-driven strategy, we will stay competitive, improve performance, and achieve long-term sustainable growth. While the Group faces significant challenges in the short-term as we reset and reshape the food business as part of the multi-year transformation plan, the Group's other businesses and key associates are performing well and have strong market positions."

Dairy Farm shares closed unchanged at US$8.94 on Thursday before the results were announced.