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Super Group's Q2 profit falls 30% to S$125.5m
SUPER Group on Tuesday reported a 30 per cent drop in net profit to S$10.5 million for its second quarter ended June 30, 2015, on the back of a 5 per cent dip in revenue to S$125.5 million.
Earnings per share fell to 0.94 Singapore cent, from 1.35 cents a year ago.
The instant food and beverage brand owner and manufacturer said the lower revenue was due to lower sales from both its segments: branded consumer and food ingredients sales.
Branded consumer sales fell 4 per cent to S$80 million due to lower sales in the Philippines and eastern Europe markets. Food ingredients sales fell 5 per cent to S$45.5 million due to lower sales into the Philippines and China markets.
Earnings-wise, higher depreciation and income tax expenses led net profit to fall in Q2.
The quarter saw higher depreciation expenses of S$6.1 million (versus S$3.8 million a year ago) following the completion of certain expansion projects, including the Botanical Herbal Extract facility in the second half of 2014.
Effective tax rate also increased to 28 per cent of profit before tax (versus 12 per cent a year ago) due to the expiry of tax incentives enjoyed by an overseas subsidiary, as well as withholding tax expenses incurred on dividend remittances from an overseas subsidiary, it said.
The management expects market conditions to stay competitive in the next 12 months.
First, the group's markets in Myanmar, Malaysia and eastern Europe continue to be impacted by volatilities in their domestic currencies, which weakened against the US dollar and Singapore dollar in Q2.
Secondly, raw material costs will also affect the group's operating performance.
Despite the ongoing economic challenges, Super said it will focus on new product innovation for the branded consumer segment as it continues to create products for the rising middle class in Asia.
For its food ingredients segment, Super will focus on deepening the market penetration of its premium products. It plans to grow its food ingredients business beyond Asia.
Its counter added 3.5 cents to S$0.95 on the stock market on Tuesday.