Sheng Siong’s Q3 net profit up 12.6% on the back of higher revenue

SUPERMARKET chain Sheng Siong posted a 12.6 per cent increase in net profit to S$39.1 million for the third quarter ended Sep 30, from S$34.7 million the year before.

Revenue grew 5 per cent year on year to S$363.2 million, driven by the opening of five new stores over the same period, Sheng Siong said in a business update on Tuesday (Oct 29).

Comparable same-store sales improved 1.5 per cent on a year-on-year basis, it added.

In line with the increase in revenue, the supermarket’s gross profit grew by 8.4 per cent year on year to S$113.8 million in Q3 FY2024.

Earnings per share stood at 2.60 Singapore cents, 12.6 per cent higher than in the year-ago period.

Cash flow generated for the third quarter ended Sep 30 rose by 7.6 per cent from the year before to S$59.1 million, supported by higher profit posted during this period.

The group’s administrative expenses and distribution expenses both grew due to higher staff costs and higher variable bonuses issued to staff on the back of the group’s stronger financial performance.

Administrative expenses rose 15.9 per cent for Q3 FY2024, compared to the year before, while distribution expenses rose 6.4 per cent over the same period.

Lim Hock Chee, the chief executive officer of Sheng Siong, said that although the retail market remained in the doldrums, the company was hopeful that there would be improvements in the remainder of FY2024.

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“The reduction of the US interest rate may potentially drive domestic interest rates downwards, which will provide relief to the household budget on the back of lower mortgage costs,” he added.

With Singapore’s supermarket industry expected to see higher operational expenses, he said that the group will focus on strengthening its core competencies and diversifying its supply chain to withstand external disruptions.

“At the same time, we will further optimise our sales mix and continue to work with good suppliers to provide customers with high-quality products at competitive prices,” he added.

Shares of Sheng Siong closed 0.6 per cent or S$0.01 higher at S$S$1.58 on Tuesday before the announcement.