Dairy Farm's Q1 overall business performance hurt by ongoing Covid-19 pandemic

DAIRY Farm International's overall business performance for the first quarter of this year continues to be "significantly affected" by the Covid-19 pandemic, said the group in a bourse filing on Wednesday.

With buying behaviours normalising from the relative high sales base in 2020, the group's like-for-like sales for its grocery retail businesses had dipped in the first quarter compared with the corresponding period last year. Profitability for the division also took a hit as a result of lower sales.

The first-quarter performance of its grocery retail store Yonghui in China, for instance, dipped from the previous year's high base. Gross profit margins also fell as a result of increased competition, said the group.

However, the group noted that it "remains encouraged by the progress made in the transformation of the business", given that the underlying profitability for the division in the first quarter of 2021 significantly surpassed profits achieved in the first quarter of 2019.

Within South-east Asia, performance in Indonesia continues to be the most badly hit by the pandemic, given that the country's movement restrictions has reduced footfall in hypermarkets and malls.

The group's convenience business, however, reported improved like-for-like sales performance, driven primarily by strong growth in southern China in the quarter as lockdown measures eased.

Its health and beauty businesses continue to suffer from the lack of tourists in Hong Kong and lower footfall in malls in South-east Asia, where many of its Guardian outlets are located.

Sales in the home-furnishings business were higher than in the equivalent period last year. Like-for-like sales growth was in line with last year, despite global shipping container shortages impacting stock availability. But profitability dipped as a result of expenses from the opening of new stores and reduced sales in Indonesia.

Business for the group's 50 per cent-owned associate, restaurant chain Maxim's, picked up in the first quarter, but revenue remained impacted by government restrictions on opening hours and restaurant capacity.

Meanwhile, the performance of the Philippine-listed multi-format retail group Robinsons Retail Holdings in the first quarter was affected by ongoing government-imposed restrictions on movement. Sales for Robinsons Retail's supermarket segment were also impacted by a high base in 2020.

The group said that despite the challenges posed by Covid-19, it had made good progress in executing its key transformation initiatives. For instance, it relaunched the Giant brand across more than 50 stores in Malaysia.

It also opened a third Ikea store in Malaysia. Yuu Rewards, a rewards app in Hong Kong, continues to grow and now has around 3.3 million members, with over 60 billion points issued.

Shares of Dairy Farm ended Wednesday at US$4.34, down US$0.05 or 1.1 per cent.