Supermarket chain Sheng Siong Group, the unlikely beneficiary of the pandemic, has reported earnings of $34.4 million for 3QFY2021 ended Sept 3, up 8.3% y-o-y.
Revenue in the same period was up 6.4% y-o-y to $348.1 million, driven by both new stores’ sales and higher sales from existing stores.
The company also benefited from a 2-percentage point improvement in gross margins to 29% for the quarter, due to a better sales mix.
Sheng Siong notes that due to the spike in the number of infected cases, demand from consumers trying to stock up on daily essentials will likely drive overall sales to a higher level than this time last year.
“However, as the Government remains committed to transition towards a Covid-19 endemic living and with the opening of more ‘vaccinated travel lanes’2, it is likely that demand will taper off,” the company warns.
Going forward, Sheng Siong is on the lookout for more locations to open new stores. It warns that competition in the supermarket industry is expected to remain keen.
“Although there was no major disruption to the supply chain the past year because of Covid-19 pandemic, there are still risks of disruption possibly from the global impact of Covid-19, weather and/or geo-political events that may affect input prices,” the company adds.
CEO Lim Hock Chee notes that with borders poised for further relaxation, the manpower crunch faced by the construction sector is seen to ease, which will help put more newly-built flats in the hands of their buyers.
“This will help us to continue expanding our presence within Singapore to drive further business growth,” says Lim.
Sheng Siong closed Oct 28 at $1.42 down 0.7%.
Photo: Albert Chua / The Edge Singapore
