Net profit at supermarket chain Sheng Siong more than doubled in its second quarter to $46.2 million, from $18.4 million a year ago, on the back of strong revenue growth, improved gross margin and government grants.

Revenue for the three months ended June 30 rose 75.8 per cent to $418.7 million, mainly on elevated demand from the Covid-19 situation, as consumers stocked up to guard against the risk of disruption to supply chains.

And with the implementation of the circuit breaker period, dining out was disallowed, which led to more people purchasing fresh food to cook and eat at home, the company said.

Meanwhile, revenue from its stores in Kunming, China, continued to grow at a healthy pace.

Earnings per share rose to 3.07 cents, from 1.23 cents a year ago. Gross margin was 28.1 per cent, up from 27.4 per cent a year ago, due to selling prices underpinned by strong demand, stable input prices thanks to diversification in sourcing, and higher sales of house-brand items, which command a higher gross margin.

Sheng Siong declared an interim cash dividend of 3.5 cents a share, double what it paid out a year ago.

It expects elevated demand caused by Covid-19 to ease with the gradual reopening of the economy, while competition in the supermarket industry may stay keen as a result of e-commerce platforms gaining better visibility during the circuit breaker.

THE BUSINESS TIMES