Sheng Siong’s Q1 2023 profit falls 5.2% to S$33.2 million
Benjamin Cher
SHENG Siong on Friday (Apr 28) reported a 5.2 per cent fall in Q1 2023 profit to S$33.2 million from S$35.1 million in Q1 2022.
Revenue for the quarter fell 0.4 per cent to S$356.5 million from S$358 million a year prior. The slight decrease in revenue is driven by the normalisation after easing of pandemic restrictions.
Gross profit margin improved 0.1 point to 28.8 per cent in Q1 2023 from 28.7 per cent in Q1 2022. This was driven by an improved sales mix of products with higher margins.
Administration expenses increased 6.5 per cent to S$63.2 million in Q1 2023 from S$59.4 million in Q1 2022. This was mainly due to an increase in utility expenses as the supermarket company recently renewed its electricity supply agreement at a higher prevailing market rate at the end of 2022, and higher labour costs from a tight labour market.
Rising inflation and geopolitical tensions continue to dampen the economic outlook. Supply chain disruptions have eased but are expected to continue further in 2023, said Sheng Siong.
The high inflationary environment continues to impact consumers, who may choose cheaper alternatives such as buying groceries and dining at home. The company believes that this might drive sales of its house brand and improve margins as consumers lean towards cheaper products.
Sheng Siong expects continued keen competition in the supermarket industry.
“In the midst of such economic uncertainty, the group remains focused on building on its core competencies and value-for-money offerings,” said its chief executive officer, Lim Hock Chee.
Shares of Sheng Siong closed unchanged at S$1.77 on Friday.
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