Sheng Siong Q2 net profit up 6.4% to S$17.1m

SUPERMARKET chain Sheng Siong Group's net profit grew 6.4 per cent to S$17.1 million for the second quarter ended June 30, up from S$16.1 million in the year-ago period, the group announced on Monday evening after the market closed.

This was on the back of a 5.7 per cent rise in revenue to S$213 million, mainly contributed by the opening of new stores - four in the first quarter and three in the last five months of FY 2017 - and comparable sales from existing stores.

As at June 30, Sheng Siong had 48 stores in Singapore and one in China, compared to 42 in Singapore a year before. The opening of two new stores in Bukit Batok and Yishun on July 13 has since taken the number of Singapore stores to 50.

Earnings per share for the second quarter rose 6.5 per cent to 1.14 Singapore cents, from 1.07 Singapore cents for Q2 2017. Sheng Siong has declared an interim cash dividend of 1.65 Singapore cents per share.

Chief executive officer Lim Hock Chee said: "In line with our commitment to expand our retail network across Singapore, particularly in areas we do not have a presence, we will stay focused but disciplined to look for new retail space. Nurturing the growth of our new stores in Singapore and China, and rejuvenating the old stores remain one of our key priorities.

"We will continue with our efforts in lowering input cost by improving the sales mix with a higher proportion of fresh produce, and increasing labour productivity by deploying smart processes and systems," he added. Lower input costs, along with a better sales mix, contributed to Sheng Siong's improved gross margin of 27.3 per cent in the second quarter, compared to 26.8 per cent in the year-ago period.

Sheng Siong's shares closed down two Singapore cents or 2 per cent at S$1.07 on Monday before the results announcement.