Posted on 25th Apr 2012 @ 7:38 PM
Singapore, 25 April 2012 – Sheng Siong Group Ltd. (“Sheng Siong”, and together with its subsidiaries, the “Group”, “昇菘集团”), one of the largest supermarket chains in Singapore, reported an increase of 73.7% year-on-year (“y-o-y”) in net profit to S$16.8 million for its first quarter ended 31 March 2012 (“1Q2012”), mainly attributed to the gain from the disposal of its old warehouse.
The Group’s 1Q2012 revenue increased 4.0% y-o-y to S$159.8 million mainly from the higher comparable same store sales, computed from stores operating for a full quarter, which improved by 2.0%.
The new outlets at Woodlands Industrial Park and Thomson which opened in November 2011 have also contributed to the growth in 1Q2012 revenue, though this growth was partially offset by the closure of the Katong outlet in September 2011. 1Q2012 revenue was also higher than that for 4Q2011 largely due to the Chinese New Year festive sales. (See Table 2 below)
Largely due to the higher other income, 1Q2012 net profit increased to S$16.8 million. Excluding the oneoff gain and the impact of under provision of prior year’s tax amounting to S$1.6 million in relation to the disposal of available-for-sale investment in FY2010, 1Q2012’s net profit would have been S$8.0 million, lower than 1Q2011 net profit of S$9.7 million. The lower net profit is mainly attributed to the lower gross margin and the lower contribution from the Woodlands Industrial Park and Thomson outlets compared to the Katong outlet. On a positive note, 1Q2012 net profit excluding the gain from property disposal improved over 4Q2011 net profit of S$3.8 million.
Commenting on Sheng Siong’s cash generating business, Mr Lim Hock Chee (林福星), the Group’s Chief Executive Officer, said, “Our strong cash flow from operations in 1Q2012 of S$12.1 million enabled us to continue to strengthen our cash position to S$149.1 million as at 31 March 2012. We are also in a strong financial position with no borrowings.” The Group’s cash and cash equivalents was also boosted by the sale of its old warehouse.
On the business front, Mr Lim added, “The Group has signed leases for two new outlets totalling 19,000 sq ft. With the opening of these outlets in 2Q to 3Q 2012, the Group’s total retail area is expected to expand by about 5.5%. The opening of these new outlets will contribute positively to our revenue.”
As much as the Group is continuously seeking suitable premises to operate at locations where it does not have a presence currently, the Group is wary that competitors are doing likewise. The Group is also concerned that the current uncertainties in the global economy, high oil prices and threat of inflation might impact on its margins if it cannot pass the increase in cost to its customers. Notwithstanding, the Group is cautiously optimistic that its retail and supermarket business serving the mass market is resilient to these challenges.
Print version (PDF - 91.1 KB)
Q1 2012 Financial Statements (PDF - 131 KB)