DFI Retail Group’s Q1 underlying profit falls 18% on sale of Chinese supermarket

[SINGAPORE] DFI Retail Group’s underlying profit for Q1 2025 fell 18 per cent compared with the same period a year ago, due to the divestment of Yonghui Superstores last year.

The Chinese supermarket operator contributed US$23 million in earnings in the corresponding period a year ago.

Excluding the divestment, the underlying profit of the mainboard-listed group rose 28 per cent for Q1 compared with a year ago.

DFI Retail Group said in a bourse filing on Monday (May 19) that it continues to expect its underlying profit for FY2025 to be between US$230 million and US$270 million, supported by an organic revenue growth of about 2 per cent.

The group’s underlying subsidiary sales for Q1 of FY2025 were stable on a like-for-like basis, with strong performance in the health and beauty segment offset by lower contributions from other divisions. The underlying subsidiary sales exclude the impact of Hong Kong’s cigarette tax and the divestment of its Hero Supermarket business in Indonesia.

Within its home market of Hong Kong, the group saw its like-for-like sales down by 2 per cent for Q1, compared with a year ago. The group noted that growth in the market “slowed noticeably” in Q1, even as cross-border travel between Hong Kong and China has continued.

Operating performance

Sales in DFI Retail Group’s health and beauty division for Q1 were up 4 per cent compared to a year ago, with all operating markets reporting positive like-for-like sales growth. Pharmacy chain Guardian continued to deliver strong performance across key markets, particularly in Indonesia, which achieved double-digit growth in both like-for-like sales and profit.

However, like-for-like sales in its convenience division fell 6 per cent year-on-year. Cigarette sales slowed after a tax increase was imposed on cigarette sales in Hong Kong last February. Overall, non-cigarette sales on a like-for-like basis were down 2 per cent compared with Q1 2024.

Similarly, DFI Retail Group’s food division reported marginally lower sales this quarter. Sales in this division remained largely stable year on year in the Hong Kong market due to growth from omnichannel sales. The division posted a 14 per cent year-on-year increase, supported by growth in its Singapore food business.

SEE ALSO

Don’t mourn DFI’s sale of Cold Storage, Giant; its modernisation journey could pay off soon

‘The customer wishes to be recognised’: Cold Storage, Giant in Singapore to focus on ‘superior’ customer service, says buyer Macrovalue

DFI Retail Group sells Singapore food business, including Cold Storage and Giant, for S$125 million to Macrovalue

Malaysia’s Macrovalue is buying Cold Storage and Giant: Who are its owners and what’s the game plan?

DFI could offer a special dividend after selling Cold Storage, Giant and other units: CGSI

Jardine’s DFI says S$125 million sale of Singapore food business not price-sensitive, but investors disagree

More

The group said that its home furnishings division reported a significant recovery in its underlying profit despite intense competition. This was due to effective cost control measures across markets. For example, Ikea Hong Kong is strengthening its omnichannel proposition to compete better with digital players from mainland China, while Ikea Indonesia remains focused on expanding its sales through digital channels.

“The group believes that Ikea remains well-positioned to capitalise on a recovery in demand for home furnishings when market conditions improve, given its strong brand equity and commitment to consumer protection and product safety,” it said.

DFI Retail Group added that the divestment of its food business in Singapore, which includes the Cold Storage, CS Fresh, Jason’s Deli and Giant brands, will be completed by the end of 2025 and will strengthen the group’s balance sheet.

The counter closed US$0.04 or 1.5 per cent lower at US$2.69 before the announcement on Monday.