SINGAPORE (Oct 30): Sheng Siong Group reported a 9.4% drop in earnings to $17.8 million for the 3Q18 ended September, from $19.7 million a year ago.
This was mainly due to the absence of a tax refund amounting to $2.2 million a year ago. Excluding this, Sheng Siong’s net profit would have increased by 1.5% in 3Q18.
3Q18 revenue rose 8.0% to $227.9 million, from $210.9 million a year ago, mainly due to the opening of 10 new stores since 2017.
However, administrative expenses climbed 16.6% to $39.0 million in 3Q18, from $33.5 million a year ago on the back of higher staff and rental costs due to the opening of new stores.
As at end September, cash and cash equivalents stood at $67.2 million.
Looking ahead, Sheng Siong says competition in the supermarket industry is expected to remain keen, particularly with the increase in the number of new HDB shops and large online retailers.
Meanwhile, the group cautions its input costs could be driven up by disruptions in the supply chain as well as escalating trade tensions.
“Going ahead, we remain committed to our store expansion plans in Singapore, especially in areas where we do not have a presence. In addition, we will be nurturing the growth of our new stores in Singapore and China,” says Sheng Siong Group CEO Lim Hock Chee.
“We will focus on improving the gross margin and cost efficiency, thereby lowering operating expenses as a percentage revenue,” he adds.
Shares in Sheng Siong closed flat at $1.08 on Tuesday.
