Loading... Please wait...

Latest News & Events

Sheng Siong Group reports S$7.0 million net profit for 2QFY2012

Posted on 27th Jul 2012 @ 2:52 PM

Singapore, 26 July 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 a net profit of S$7.0 million for the second quarter ended 30 June 2012 (“2QFY2012”).


Revenue increased 5.2% year-on-year (“yoy”) to S$146.9 million for 2QFY2012, due to the improvement in comparable same store sales and the net increase of 4 stores -- opening of Teck Whye, Thomson Imperial Court, Woodlands Industrial Park, Toa Payoh and New World Centre (Jalan Besar) outlets and the closure of Tanjong Katong supermarket.

Gross profit margin declined 1 percentage point (“p.p”) yoy to 21.9%, due to the carry over effect of the 4QFY2011 price war among supermarket operators. Competitive price pressure is less intense, with quarter-on-quarter (“qoq”) gross profit margin increasing 1.1 p.p from 20.8% for 1QFY2012.


Net profit decreased 2.0% yoy to S$7.0 million for 2QFY2012, due to lower gross profit margin and higher operating expenses. Higher operating expenses incurred is attributable mainly to rental and utilities expenditures of new stores, 5-10% adjustment of rental renewal rates for existing stores and salary adjustments. With stringent cost control measures in place, operating expenses as a percentage of revenue remained stable even though revenue from the new outlets have yet to reach expected turnover levels.

In 2QFY2012, cash flow used in operating activities amounted to S$1.3 million with the bulk of cash outflow coming from stocking up of inventories for the up-coming Hari Raya and “Chinese Seventh Month” festive periods and from the payment of bonuses relating to FY2011 staff and directors’ bonuses. Cash flow used in investing activities was S$2.3 million mainly due to capital expenditure incurred for the new Toa Payoh and New World Centre outlets. With the distribution of FY2011 final dividend amounting to S$24.5 million or 1.77 cents per share, cash and cash equivalents decreased by S$32.5 million.

Business Outlook

Moving forward, the Group will continue to actively look for suitable shop spaces, particularly in housing estates where they do not have a presence. The Group has secured 2 additional outlets in Bukit Batok and Bedok North# of around 4,200 sq. ft. and 3,100 sq. ft. respectively, and has began operating the first 24-hour outlet in Geylang of around 11,000 sq. ft., in early July.

Mr. Lim Hock Chee, Chief Executive Officer of Sheng Siong Group Ltd., commented, “Based on the current pipeline of new stores, we will boost our retail area by around 38,000 sq. ft from the end of 2011. The Group will have 30 outlets with a total retail area of approximately 386,000 sq. ft., and these new stores are expected to contribute to our top-line."

To reward shareholders, we are pleased to declare an interim cash dividend of 1 cent per share. We remain committed to distribute up to 90% of our FY2012 net profit.

# Sheng Siong was the highest bidder in a recent HDB public tender. We are expecting a written confirmation from HDB on the award of this supermarket space for our operations.

Print version (PDF - 356 KB)

Q2 2012 Financial Statements (PDF - 360 KB)