Supermarket chain Sheng Siong reported Friday its first quarter net profit rose 6 percent on-year to S$19.4 million, mainly on the addition of 10 new stores.
Revenue for the quarter ended 31 March increased 10.1 percent on-year to S$251.4 million, Sheng Siong said in a filing to SGX.
Maybank KimEng had forecast net profit of S$18.3 million on revenue of around S$251 million.
The growth in revenue from the new stores was partially offset by comparable same-store sales slipping 1.0 percent, mainly on cautious consumer sentiment and the opening of new supermarkets near Sheng Siong’s existing outlets, the filing said.
“Selling prices were largely stable. The sales mix improved further in the first quarter of 2019 with a higher percentage of fresh produce
sold as compared with the first quarter of 2018, but the positive spin-off was offset by slightly lower supplier’s rebates,” Sheng Siong said.
In its outlook, the supermarket operator said the industry was expected to remain competitive, and it pointed to concerns about disruption from trade tariffs.
Lim Hock Chee, Sheng Siong’s group CEO, pointed to the grocer’s successful bids for three new HDB shops, located at Bukit Batok, Anchorvale Road and Sumang Lane; the stores are expected to be operational by the end of June, he said.
“Moving ahead, we remain committed to expand our retail network in Singapore, especially in areas where our potential customers reside,” Lim said in the statement.
“While nurturing the growth of our new stores in Singapore and China remains as one of our priorities, we will also continue with our efforts to enhance our gross margin and improve cost efficiency by changing to a higher sales mix of fresh produce and deriving more efficiency gains in the supply chain,” he said.