SINGAPORE (Oct 30): Sheng Siong Group has posted earnings of $20.5 million for the 3Q19 ended September, some 15.9% higher than earnings of $17.7 million recorded in the corresponding quarter a year ago.

This translates to higher earnings per share (EPS) of 1.37 cents for 3Q19, compared to EPS of 1.19 cents in 3Q18.

3Q19 revenue rose 11.4% to $253.8 million, from $227.9 million a year ago.

The increase was mainly attributable to the addition of 13 new stores in Singapore since last year.

However, comparable same store sales contracted marginally during the quarter as a result of poor consumer sentiment.

Gross profit climbed 14.0% to $68.7 million in 3Q19, on the back of slightly higher sales mix of fresh versus non-fresh produce, as well as slightly lower input prices as a result of higher suppliers’ rebates.

Other income jumped 61.3% to $2.9 million, largely attributable to government grants under the Wage Credit, and Special Employment Schemes and subsidies for productivity improvement projects.

Administrative expenses grew 12.6% to $43.9 million, mainly due to higher staff costs as additional headcount was required to operate the new stores, higher provision for bonuses because of the better financial performance, and an increase in depreciation.

As at end-September, cash and cash equivalents stood at $82.6 million.

Net asset value (NAV) per share rose to 19.68 cents as at end-September, compared to NAV per share of 19.30 cents as at end-December 2018.

The management notes that consumer sentiment seems to have deteriorated in the last few months, with sales at supermarkets seeing a dip.

At the same time, it reports that competition has been keener as competitors have been adding more new stores into the market.

“Going ahead, we will continue with our efforts in expanding our retail network in Singapore, especially in areas where our potential customers reside,” says Lim Hock Chee, Sheng Siong’s chief executive officer.

“Besides placing focus on nurturing the growth of our new stores in Singapore and China, we remain committed to enhancing the gross margin and lowering input cost by improving the sales mix with a higher proportion of fresh produce and deriving more efficiency gains in the supply chain,” he adds.

Shares in Sheng Siong closed 1 cent lower at $1.14 on Wednesday before the results announcement.