Sheng Siong Q3 net profit grows 5.7% to S$34.8 million

GROCER group Sheng Siong on Thursday (Oct 26) posted a third-quarter net profit of S$34.8 million, up 5.7 per cent from the S$32.9 million posted the year before.

Revenue in Q3 rose 3.7 per cent to S$345.8 million, from S$333.5 million last year.

Sheng Siong said that sales contribution from its six new stores rose by 2.2 per cent, which is more than the 1.8 per cent growth logged in its other comparable stores.

Earnings per share rose 5.9 per cent to 2.31 Singapore cents, up from 2.18 cents last year.

The group expects challenging economic and geo-political conditions to linger. It also flagged climate risks from the onset of the El Nino weather pattern, which may threaten agriculture yields and drive up food prices amid smaller harvests and pricier animal feed.

Margins may also suffer as a result of fierce pricing action among major grocers, and higher energy and staff costs, Sheng Siong added.

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However, the group expects a boost in sales from the support packages distributed by the government; it also notes that the higher GST rate and carbon taxes have created a growing preference for home-cooked meals.

“The group will explore potential technological improvements and focus on strengthening its core competencies to improve overall operational efficiency and productivity,” it said.

Shares in Sheng Siong closed flat at S$1.47 on Thursday.