Sheng Siong’s first-half net profit up 7% on higher revenue
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Revenue grew 3.4 per cent year on year to $714.2 million, driven by a longer sales period before the Chinese New Year.
PHOTO: ST FILE
Jessie Lim
SINGAPORE – Supermarket chain Sheng Siong posted a 7 per cent increase in net profit to $69.9 million for the first half ended June 30, from $65.4 million the year before.
Revenue grew 3.4 per cent year on year to $714.2 million, driven by a longer sales period before Chinese New Year, Sheng Siong said on July 29.
“The group’s profit margins remained relatively stable in the first half, with a slight growth of 0.4 percentage point to 30.1 per cent, mainly due to improvements in the sales mix, but also to address rising staff costs,” the group said.
Earnings per share stood at 4.65 cents, 6.9 per cent higher than the year-ago period.
In the first half, cash flow from operating activities went up to $93 million from $77.8 million in the same period in 2023, when more funds went into paying suppliers.
The group’s cash position continues to be strong with $349.6 million, having risen by $25.2 million from $324.4 million as at Dec 31, Sheng Siong said.
An interim dividend of 3.2 Singapore cents per share has been declared and will be paid by Aug 30.
Mr Lim Hock Chee, Sheng Siong’s chief executive officer, said: “(We have) continued to perform well despite external disruptions, showcasing our resilience and the ability to navigate the uncertainty.
“We are dedicated to offering quality products at affordable prices to our customers, and ensuring a well-diversified supply chain to mitigate any potential risk.”
As a heavily import-dependent country, Singapore is particularly vulnerable to supply chain disruptions, Sheng Siong said.
Global transportation costs have surged due to prolonged attacks in the Red Sea, forcing ships to take longer, more expensive routes. Food yield uncertainty, exacerbated by extreme weather patterns, further contributes to these pressures.
To mitigate these risks, the group will continue to diversify its sources of supply and collaborate with its suppliers, Sheng Siong said.
Amid intense competition in an industry in which operators try to outdo their rivals by offering promotions, the group also faces margin pressure from increasing labour and energy costs.
To address these challenges, the group will continue improving its sales mix and focus on strengthening its core competencies to improve operational efficiency and productivity, Sheng Siong said.
In the first half, Sheng Siong opened two new stores and is awaiting the results of three more. It also opened a store in China in June, which brings its number of stores there to six.
Shares of Sheng Siong closed flat at $1.50 on July 29 before the announcement.
