Sheng Siong's fourth-quarter profit soars 24 per cent to $14.6m

SINGAPORE - Boosted by higher revenue and improved gross margins, supermarket group Sheng Siong reported a near 24 per cent year-on-year jump in net profit to S$14.61 million for the fourth quarter ended Dec 31, 2015.

The quarter also saw other income rising to S$1.95 million from S$875,000. Revenue edged up nearly 5 per cent at S$187.1 million as new stores contributed 6.6 per cent to the topline. This was offset by a slight contraction from same store sales of 1.7 per cent. The group opened five new stores last year, taking its total number of stores to 39.

"Renovation done to the big store at Clementi and worsening demand conditions seemed to have aggravated the decline in comparable same store sales in 4Q2015," the group said.

Earnings per share came to 0.97 cent, up from 0.78 cent a year ago.

During the quarter, gross margin improved to 25 per cent from 24.3 per cent a year ago.

For the full year, net profit rose 19.3 per cent to S$56.79 million due to higher revenue, improved gross margin, higher other income and net tax refunds. Revenue, meanwhile, increased 5.3 per cent to S$764.43 million.

"Sales at supermarkets have not been exciting and the group expects competition in the supermarket industry to remain keen," warned Sheng Siong. "Consumers are expected to be more cost conscious, which may affect the group's ability to pass on increases in input cost in full to the customers." It added that while it is looking for suitable retail space - especially in areas where it does not have a presence - competition for space remains tough.

A final dividend of 1.75 cents was proposed, up from 1.5 cents a year ago.

The counter closed at 86.5 Singapore cents on Tuesday, unchanged.

nishar@sph.com.sg

This article was first published on Feb 24, 2016.
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