SINGAPORE (July 29): Supermarket chain Sheng Siong Group has reported earnings of $18.4 million for the 2Q19 ended June, up 7.4% from $17.2 million in 2Q18, on the back of higher revenue. This brings total earnings for 1H19 to $37.8 million, some 6.6% higher than $35.4 million in 1H18.
Earnings per share (EPS) climbed 7.9% to 1.23 cents for 2Q19, compared to 1.14 cents in 2Q18.
2Q19 revenue grew 11.8% to $238.2 million, from $213.0 million a year ago.
This was mainly attributable to contribution from the opening of 13 new stores, which continues to be Sheng Siong’s main driver of growth in revenue.
Revenue from the group’s first store in Kunming China also grew at a healthy pace.
Administrative expenses rose 14.6% to $42.6 million during the quarter, mainly due to higher staff costs.
Staff costs increased by $2.1 million compared to last year, due to additional headcount required to operate the new stores and a higher provision for bonus as a result of the higher operating profit.
The group also reported $5.6 million increase from the depreciation of right-of-use assets, mainly attributable to the fitting out of the new stores and the purchases of IT equipment mainly for the mini ATM project.
As at end June, cash and cash equivalents stood at $82.9 million.
The board of directors have recommended an interim dividend of 1.75 cents per share for the period, to be paid on Aug 27.
This is 6% higher than the interim dividend of 1.65 cents per share in the corresponding period last year.
Looking ahead, the group says it is still looking for suitable retail spaces in areas where it does not have a presence.
“Moving ahead, we remain focused on widening our reach by continuously looking for suitable retail space, particularly in areas where our customers reside but we do not have a presence,” says group chief executive officer Lim Hock Chee.
The group has tendered for six more HDB stops, and is awaiting the outcome.
Following the opening of three new stores in May 2019, Sheng Siong has expanded its total retail square footage in Singapore to 512,000 sq ft and increased its store count to 57.
“Besides nurturing the growth of our new stores in Singapore and China, we strive to enhance our gross margin and improve cost efficiency via higher sales mix of fresh produce and more efficiency gains in the supply chain,” Lim adds.
Shares in Sheng Siong closed 1 cent higher at $1.11 on Monday.
