Sheng Siong Group OV8 has reported earnings of $36.3 million for the 1QFY2024 ended March 31, 8.9% higher y-o-y.
Revenue for 1QFY2024 increased by 5.5% y-o-y to $376.2 million, while the group’s net profit margin (NPM) increased 0.3 percentage points (ppts) y-o-y to 9.7%.
The higher revenue was mainly driven by an 8.0% y-o-y increase in same store sales, and supported by a longer sales period before the Chinese New Year compared to last year.
In line with the increase in revenue, gross profit increased by 7.6% y-o-y to $110.7 million for the 1QFY2024.
The group’s gross profit margin (GPM) for the quarter rose by 0.6 ppts y-o-y to 29.4%, due primarily to continued efforts to optimise sales mix while addressing increased staffing costs and utility expenses.
Other income increased by 45.6% y-o-y to $4.0 million in 1QFY2024 due to higher government grants and miscellaneous income.
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For the quarter, the group’s operating expenses increased due to a 7.2% y-o-y increase in selling and distribution expenses to $58.1 million and a 15.6% y-o-y increase in administrative expenses to $14.5 million as a result of higher staff variable bonuses.
As at March 31, Sheng Siong’s operating cash flow stood at $37.9 million, with a cash and cash equivalents’ balance of $352.3 million.
CEO Lim Hock Chee says: “Despite economic uncertainty, the group has demonstrated resilience and maintains its commitment to providing customers with quality products at affordable prices. To manage risks effectively, we are diversifying our supply chain and refining our sales mix towards higher-margin products.”
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Lim says the group remains proactive in seeking retail spaces in new and existing housing estates with regards to its store expansion in Singapore. Sheng Siong opened two new stores in FY2023 and one in 1QFY2024, and is expecting announcements on the results of four outstanding tenders.
In early April, the group expanded the retail floor space of its existing store at Blk 154 Bukit Batok by connecting it to the newly leased space at Blk 159 Bukit Batok.
Lim adds that the supply pipeline of HDB houses is robust, with the expectation of another 6 stores to be put up for tender in the next six months.
Meanwhile, the group’s operations in China are experiencing steady growth, with its sixth store scheduled to open in 2QFY2024.
Shares in Sheng Siong closed 1 cent higher or 0.65% up at $1.54 on April 25.
