SINGAPORE (Apr 26): Sheng Siong Group saw its earnings grow 5.9% to $19.4 million for the 1Q19 ended March, from $18.3 million a year ago, on the back of higher revenue.
1Q19 revenue climbed 10.1% to $251.4 million, from $228.3 million a year ago.
The increase was mainly due to the opening of 10 new stores in FY18 – six of which were opened after 1Q18.
However, this was partially offset by lower comparable same store sales, which shrank by 1.0 percentage points, mainly due to cautious consumer sentiments and the opening of new supermarkets in the vicinity of some of its existing stores.
Administrative expenses rose 10.3% to $42.2 million, from $38.3 million a year ago.
The increase was led by the net effect of depreciation of right-of-use assets, as well as higher staff costs arising from the opening of new stores, and a higher provision for bonus because of the better financial performance.
Earnings per share (EPS) grew to 1.29 cents in 1Q19, some 4.9% higher than EPS of 1.22 cents a year ago.
As at end March, cash and cash equivalents stood at $86.3 million.
Looking ahead, Sheng Siong expects the industry to remain competitive, but says it will continue to look for retail space in areas to serve unreached and new customers.
The group revealed that it recently secured three new HDB shops at Bukit Batok, Anchorvale Road and Sumang Lane, which are scheduled to be operational before the end of May/June 2019.
Sheng Siong’s subsidiary in China will also be opening its second supermarket in Kunming in 2H19.
“While nurturing the growth of our new stores in Singapore and China remains as one of our priorities, we will also continue with our efforts to enhance our gross margin and improve cost efficiency by changing to a higher sales mix of fresh produce and deriving more efficiency gains in the supply chain,” says Group CEO Lim Hock Chee.
Shares in Sheng Siong closed flat at $1.04 on Friday.
