Dairy Farm reports mixed 3Q18 results amid soft food performance, stronger health and beauty segment

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Dairy Farm International reported on Thursday that its third quarter results were mixed, with a strong performance in health and beauty offset by a softer food segment.

Sales from the food businesses in North Asia were slightly up on-year in the quarter, but profit fell on weaker margins and cost pressures, particularly from higher rents, Dairy Farm said in a filing to SGX after the market close on Thursday.

The Southeast Asian food business “continued to face challenges,” it said, with sales and profit extending declines in Singapore and Malaysia. Indonesian sales also fell, but losses narrowed on-year there in the quarter, Dairy Farm said.

The Philippine food business posted good sales growth after the opening of several new stores, but profit fell slightly on-year in the quarter due to the new stores pushing up operating costs, Dairy Farm said.

The health and beauty business in Hong Kong and Macau showed strong sales and profit growth in the quarter, while the segment showed profit improvement in Malaysia and Indonesia, it said.

For the IKEA outlets, Taiwan and Indonesia sales and profits rose, but in Hong Kong, the sales rise, supported by a new store opening last year, was offset by higher operating costs, it said.

Dairy Farm and its associates and joint ventures operate more than 7,400 outlets, including supermarkets, hypermarkets, convenience stores, restaurants, health and beauty stores and home furnishing stores, with 2017 sales above US$21 billion, it said.

It’s part of the Jardine Matheson Group.