Sheng Siong Group has reported net profit of $32.9 million for the 3QFY2022 ended Sept, 4.5% lower than the net profit of $34.4 million in the corresponding period the year before.
Net profit margin (NPM) remained stable at 9.9%.
Revenue for the quarter fell by 4.2% y-o-y to $333.5 million compared to the high base of $348.1 million in the 3QFY2021.
According to the group, the lower revenue was attributable to the relaxed Covid-19 measures, which were lifted at the beginning of the 2QFY2022. As more consumers dined out, the lower figures tapered to a new normal.
In line with the lower revenue, gross profit fell 2.8% y-o-y to $98.1 million.
Gross profit margin (GPM) rose by 0.4 percentage points y-o-y to 29.4%. This was mainly due to an improved sales mix of products with higher margins.
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In the 3QFY2022, the group’s operating expenses increased by $0.6 million y-o-y to $62.3 million, of which the bulk of which was largely due to an increase in administrative expenses driven by higher energy costs during the quarter.
As at Sept 30, cash and cash equivalents stood at $228.6 million.
Looking ahead, the group expects competition in the supermarket industry to remain keen especially in the heightened inflationary environment. Higher input costs such as energy expenses and excessive promotions by competitors could result in lower margins, it adds.
“The current inflationary environment is causing a significant shift in consumer behaviour towards saving costs. As a supermarket known for providing value-for-money propositions, we are uniquely positioned to capture this shift and bring good quality, fresh products to our valued consumers. Having said this, we are aware of the heightened near-term challenges arising from high inflation, Covid-19 pandemic-induced supply chain disruptions and geopolitical tensions that could increase costs and affect our margins,” says Lim Hock Chee, Sheng Siong’s group CEO.
“However, the group will continue to monitor the performance and increase productivity of all its stores working tirelessly on strengthening its core competencies. In order to capitalise on opportunities in the future, we will also remain committed to strategic expansion and remain on the lookout for retail space in estates where the group is yet to create its presence,” he adds.
Shares in Sheng Siong closed flat at $1.61 on Oct 27.
