Supermarket chain Sheng Siong Group reported a 9.3 per cent rise in net profit to $16.8 million for the fourth quarter, as government grants gave a boost to the group's bottom line.
Earnings per share (EPS) stood at 1.12 cents, up from 1.02 cents in the same period in 2016.
Sheng Siong received $2.6 million in government grants in the fourth quarter, more than three times the $725,000 it received in previous corresponding quarter.
The government grants were from various government agencies in partial support of productivity improvement programmes as well as grants under the Wage Credit, Special Employment Credit and Temporary Employment Schemes.
The higher net profit was also due to higher revenue, higher gross profit, improved gross margin, and tax refunds. These were partially offset by higher operating expenses.
Revenue for the three months ended Dec 31 increased 1.7 per cent to $200.3 million, while gross profit margin was up 0.2 percentage point to 26.5 per cent.
It is proposing a final dividend of 1.75 cents per share, bringing the total dividend to 3.3 cents - equivalent to a payout ratio of around 71 per cent for 2017.
AT A GLANCE
REVENUE: $829.9 million (+4.2%)
NET PROFIT: $69.8 million (+11.4%)
TOTAL DIVIDENDS PER SHARE: 3.3 cents (-12%)
For the full-year ended Dec 31, Sheng Siong's net profit rose 11.4 per cent to $69.8 million. Full-year EPS amounted to 4.64 cents, up from 4.17 cents in 2016.
Revenue was up 4.2 per cent at $830 million from the year before.
Sheng Siong said the increase in revenue was contributed by new stores opening as well as a 2.1 per cent rise in comparable same store sales. But this was offset by a temporary closure of the Loyang Point store, and permanent closure of The Verge and Woodlands Block 6A stores.
"Comparable same store sales improved in the second half of the year as consumers' sentiments improved probably because of Singapore's better economic performance and an increase in retail space," the group said.
It added that competition in the supermarket industry in Singapore is "expected to remain keen" among the traditional brick-and-mortar stores as well as the new and existing e-commerce players.
Despite that, the group believes that grocery retailing in physical stores will still be relevant, but could be complemented by online offerings, and will continue to source or bid to lease new stores.
Sheng Siong closed unchanged at 92.5 cents yesterday.