Sheng Siong posts $133.3 mil in earnings for FY2022, slight 0.4% increase

Sheng Siong's FY2022 showed little growth amid the normalisation from the pandemic and current inflationary pressures.

Supermarket operator Sheng Siong OV8 announced that its earnings for FY2022 ended Dec 31, 2022, came in at $133.3 million, just a slight 0.4% from $132.8 million in FY2021. Revenue for FY2022 declined by 2.2% y-o-y to $1.34 billion from $1.37 billion a year ago.

The decline in revenue was on the back of continued normalisation that was driven by the significant easing in mobility restrictions starting Apr 1, 2022. Comparable same store sales in Singapore declined by 4.8% y-o-y, partially offset by a 2.1% contribution from five new stores – one opened in end FY2021 and four in FY2022.

As at 31 Dec, 2022, the group has 67 stores in Singapore, an increase from 64 in the previous year, while China stores remain unchanged at four.

Despite the decline in revenue in FY2022, gross profit remained comparable at $393.5 million to last year. This was mainly due to an increase in gross profit margin from 28.7% to 29.4% in FY2022. The improved gross profit margin was a result of the change in the sales mix.

For the 2HFY2022 period, earnings were 1.4% lower y-o-y at $65.9 million, with revenue declining by 3.7% y-o-y to $662.7 million.

As at end-December, cash and cash equivalents stood at $275.5 million.

Sheng Siong’s board has declared a final dividend of 3.07 cents per share, a slight drop from 3.1 cents per share declared the same period a year ago. Along with the interim dividend of 3.15 cents, the group’s total dividend for FY2022 stands at 6.22 cents.

Lim Hock Chee, Sheng Siong’s group CEO says: “Sheng Siong has been able to successfully navigate through volatile economic and political conditions to deliver consistent results. While sales continue to normalise from the effect of the pandemic, the current inflationary environment presents us with a unique opportunity to tap on consumer behaviour towards saving costs with our value-for-money proposition. However, we are aware of the challenges that may impact our operations and increase costs going into 2023, creating margin pressures.

The group will continue to monitor global developments closely and, at the same time, look to enhance internal performance and increase the productivity of new and existing stores. More importantly, the group remains committed to growth through an increased number of stores. In line with this, we already secured retail space for a new store to be opened in March in Singapore and signed a lease agreement for our fifth store in Kunming, China.”

Shares in Sheng Siong closed at $1.62 on Feb 27.

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