Sheng Siong H2 profit down 1.4% to S$65.9m, eyes new store openings
SUPERMARKET operator Sheng Siong Group on Monday (Feb 27) posted a net profit of S$65.9 million for the second half of 2022, down by 1.4 per cent from S$66.9 million for the same period in 2021.
For the full year, the group posted earnings of S$133.3 million, up 0.4 per cent from S$132.8 million in 2021.
The board of directors has proposed a final cash dividend of S$0.0307 per share, down from S$0.031 per share in 2021. Subject to shareholders’ approval at the annual general meeting on Apr 28, the dividend will be paid out on May 19.
Revenue for H2 was down 3.7 per cent to S$662.7 million, while full-year revenue was down 2.2 per cent to S$1.3 billion despite the company’s store count in Singapore increasing by three.
Sheng Siong said more customers dined out following the easing in mobility restrictions that began in April last year, citing the “continued normalisation” following the Covid-19 pandemic.
For FY2022, the group achieved higher margins. Gross profit margin rose by 0.7 percentage points to 29.4 per cent year on year in FY2022, while net profit margin was up 0.3 percentage points to 10 per cent.
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Other income for FY2022 also rose by 42.9 per cent to S$17.3 million due to one-off recognition of rebates from suppliers.
Sheng Siong’s chief executive Lim Hock Chee said that while sales continue to normalise from the effect of the pandemic, the current inflationary environment gives the company “a unique opportunity” to tap on consumer behaviour towards saving costs with its value-for-money proposition.
He said the group could, however, see some challenges this year that may impact operations and raise costs, which would in turn crimp the company’s margins.
“The group will continue to monitor global developments closely and, at the same time, look to enhance internal performance and increase the productivity of new and existing stores,” said Lim.
He said Sheng Siong has already secured retail space for a new store to be opened in March in Singapore, and signed a lease agreement for a fifth store in Kunming, China.
The company also said competition in the supermarket industry is expected to remain keen among both brick-and-mortar stores and online markets, particularly in the current heightened inflationary environment.
“The group will continue to look out for retail spaces in new and existing HDB housing estates, particularly in estates where the group has no presence,” it said.
Shares of Sheng Siong closed flat at S$1.62 on Monday.
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