Sheng Siong reports 1H21 net profit slipped 12 percent as year-ago lockdown boost fades

Sheng Siong Supermarket in Singapore’s Little India area; taken October 2018.Sheng Siong Supermarket in Singapore’s Little India area; taken October 2018.

Grocery store operator Sheng Siong Group reported Thursday its first half net property slipped 12.1 percent on-year to S$66.1 million, due to a high base a year earlier on elevated demand from the Singapore government’s “circuit breaker” lockdown to stem the spread of the Covid-19 virus.

Revenue for the January-to-June period fell 8.8 percent on-year to S$681.7 million, the grocery store operator said in a filing to SGX.

Sheng Siong declared an interim dividend of 3.1 Singapore cents a share for the first half, down from 3.5 Singapore cents in the year-ago period, for a dividend payout ratio of 71 percent.

Outlook

Singapore’s phase two heightened alert (2HA) period, set to run from 22 July to 18 August, could result in higher demand on-year, but as the city-state pivots from a pandemic to an endemic approach with the virus and as restrictions ease, demand is likely to taper in the second half, Sheng Siong said.

In addition, government grants will likely decline ahead as the vaccination rate increases, the company said.

Lim Hock Chee, CEO of Sheng Siong, also pointed to difficulties in expansion.

“While our expansion plans in Singapore have been impacted due to the pandemic and the release of fewer tenders of new HDB shops, we continue to be on the lookout for new retail spaces, particularly in areas where we have yet to build a presence,” Lim said in the statement.

Sheng Siong, which has 63 stores in Singapore, noted it has put in two tenders for locations, but results haven’t been announced.

“Our expansion plan in China is also moving forward, having recently announced that we have signed lease agreements to set up two new stores in China,” Lim said.