Sheng Siong H1 profit falls 3% to S$65.4 million as staff costs, utilities rise
SHENG Siong on Thursday (Jul 27) reported a 3 per cent decrease in net profit to S$65.4 million for the first half of 2023, from S$67.4 million in the year-ago period.
This comes as the group incurred higher operating expenses in the period, with staff costs increasing by S$6.1 million.
“Due to the competitive labour market and the requirements of the Progressive Wage Model, the group increased employees’ salaries in FY2022,” it said.
Utility expenses also rose S$5.8 million after the group’s electricity supply agreement was renewed at a higher prevailing market rate last year.
As a result, earnings per share fell to 4.35 Singapore cents, from 4.48 Singapore cents in the same period last year.
However, the opening of five new stores in Singapore led to a 2 per cent increase in revenue to S$690.5 million, from S$676.8 million previously.
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Gross profit margin improved 0.3 percentage point to 29.7 per cent in H1 2023, from 29.4 per cent a year ago. This was driven by an improved sales mix of products with higher margins.
Sheng Siong’s cash flow position continues to remain strong, the group said. As at Jun 30, it had a cash equivalent balance of S$289 million.
An interim dividend of 3.05 Singapore cents per share was proposed, representing a dividend payout ratio of 70 per cent. The dividend will be paid out on Aug 30.
Group chief executive officer Lim Hock Chee said the group remains committed to bringing value-for-money offerings to its consumers.
The group noted that reduced harvests induced by climate change and the onset of El Nino weather have put upward pressure on food prices.
Lim said: “The group is managing risks by diversifying its sources of supply and strengthening business ties with existing suppliers. Additionally, our expansion strategy remains intact as we seek to open stores in new and existing housing estates, capitalising on the rising number of Housing Board projects in the near future.”
Shares of Sheng Siong closed 0.6 per cent or S$0.01 higher at S$1.61 on Thursday.
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