Sheng Siong H2 net profit rises 4.8% to S$66.9m on boost from new store openings

SUPERMARKET operator Sheng Siong Group saw earnings for the second half of fiscal year 2021 ended December rise 4.8 per cent to S$66.9 million, from S$63.8 million in the corresponding year-ago period.

However, for the full year, net profit was down 4.2 per cent to S$132.8 million from S$138.7 million in FY2020, as revenue fell 1.7 per cent to S$1.4 billion from a "high base" in FY2020 underpinned by elevated demand in H1 that year due to the Covid-19 pandemic.

Comparable same-store sales for the full FY2021 were also down 4.8 per cent year on year, but this was partially offset by a 2.9 per cent increment from the full-year operations of 5 new stores that were opened in FY2020, said the company.

Revenue for H2 was up 6.4 per cent to S$688.1 million. The group attributed this to the opening of 3 new stores in Singapore in H2 FY2020 which collectively constituted 23.9 per cent of the increment. A new store was also opened in August and November each in China, which amounted to 9.7 per cent of the revenue increment.

Cost of sales for H2, meanwhile, was up 3.4 per cent to S$487.3 million.

Following what was termed a "robust financial performance", Sheng Siong's board of directors has proposed a final dividend of S$0.031 per share, up slightly from a dividend of S$0.03 per share in the corresponding year-ago period.

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This will bring the group's total cash dividend for FY2021 to S$0.062 per share, down from S$0.065 per share in FY2020.

The dividend, if approved by shareholders at the group's annual general meeting on Apr 26, will be paid out on May 20.

In its outlook statement, Sheng Siong said the emergence of the Omicron variant continues to impact the Singapore economy, and the resultant uncertainty could affect the company's business outlook.

Further easing of restrictions in Singapore, coupled with an increasing percentage of the population being vaccinated, may also result in the "elevated demand" to taper down as consumers increase their spending on other social activities or international travel, said the company.

Sheng Siong also noted that there have been increasing supply chain pressures and higher energy prices resulting in higher input costs, although it said there were no major disruptions to the food supply chain in FY2021 due to the pandemic.

The group said it will continue its efforts to diversify supply sources, and work with its suppliers to minimise these disruptions.

Competition in the supermarket industry is also expected to remain keen among the "brick-and-mortar and online players", said the company, adding that it will continue to look for retail spaces in new and existing estates, particularly in those where the group has no presence. The company said it will also optimise its supply chain to ensure greater efficiency and a favourable sales mix to enhance its gross margins.

Shares of Sheng Siong ended Wednesday flat at S$1.52.