Sheng Siong rings in higher Q1 profit, sales

Home-grown supermarket chain Sheng Siong opened its first store located at 122 Ang Mo Kio Avenue 3 in 1985. Supermarket operator Sheng Shiong Group has rung up a 19.3 per cent rise in first quarter net profit to $12.5 million. -- ST FILE PHOTO:
Home-grown supermarket chain Sheng Siong opened its first store located at 122 Ang Mo Kio Avenue 3 in 1985. Supermarket operator Sheng Shiong Group has rung up a 19.3 per cent rise in first quarter net profit to $12.5 million. -- ST FILE PHOTO: KEVIN LIM

SINGAPORE - Supermarket operator Sheng Shiong Group has rung up a 19.3 per cent rise in first quarter net profit to $12.5 million.

Revenue for the three months to March 31 was up 5.7 per cent at 189.7 million on higher sales from existing stores as well as contributions from eight new stores.

Comparable same store sales rose by 3 per cent. It would have been 3.9 per cent higher, if the stores at Bedok Central and The Verge, which were affected by construction work in the vicinity, were excluded.

The increase in comparable same store sales was the result of longer operating hours for most of the stores and marketing initiatives.

The effects of lower input costs derived from the distribution centre, higher selling prices and adjustment to rebates received from suppliers resulted in gross margin improving to 23.8 per cent compared with 22.5 per cent in the same period last year.

Earnings per share rose to 0.91 cent from 0.76 cent previously while net asset value per share climbed to 11.73 cents compared to 10.83 cents as at Dec 31.

Looking ahead, Sheng Siong noted that the supermarket environment is expected to remain competitive.

Besides competitive pressures, gross margin would be affected if cost of goods rises from food inflation that may be caused by disruption to the supply chain.

The government's restriction on the supply of foreign labour and the impending increase in foreign workers' levy are expected to drive up manpower cost and increase operating expenses.

The group did not find suitable retail space to open stores during and finding new retail space continued to be challenging.

"Our plan to open new stores in areas where we do not have a presence could be hampered if we cannot find suitable retail space." it noted.

Sheng Siong shares rose half a cent to 60 cents before the results were announced.