Sheng Siong makes S$29 million profit in 3 months, staff get 1 month extra salary for working hard

Hard work paid off.

Belmont Lay | April 28, 2020, 11:07 PM

Thanks to everybody in Singapore being bored and going to the supermarket to buy items out of necessity or for fun the past several weeks, supermarket operator Sheng Siong posted a net profit of S$29 million for the first quarter ended March 31, 2020.

This figure is 49.9 per cent higher than what was achieved in 2019 in the same period of time.

Where net profit came from?

The net profit stemmed from a higher revenue, better gross margin, higher other income, and a less-than-proportional increase in operating expenses relative to the increase in revenue.

The sale of Sheng Siong house brand products helped gross margin improve to 27 per cent in Q1 from 26.1 per cent a year ago.

The biggest gain came from non-fresh products, as sources have been diversified to cope with the sudden surge in demand.

Sheng Siong also noted it did not experience major disruptions in its supply chain in the first quarter.

How much did revenue increase?

Revenue went up 30.7 per cent to S$328.7 million as a result of Covid-19 and good Chinese New Year sales, due to recovering consumer sentiment and starting from a low base effect in 2019.

Earnings per share in Q1 was 1.91 cents, compared with 1.29 cents a year ago.

But no dividend was declared, similar to the corresponding period a year ago.

The rise in Sheng Siong share price has made its owners even richer billionaires in Singapore, a feat announced just two weeks ago.

And the benefits spilled over.

Bonus for staff

Staff, excluding directors, will be rewarded with an additional month of salary for working hard during the recent period of elevated demand in Q1, Sheng Siong announced.

The group noted that demand and sales rose when the government moved the country from Dorscon yellow to orange on Feb, 7 as Covid-19 ravaged economies.

More people stayed home for meals and stocked up on supplies.

Sheng Siong will expand

Sheng Siong added that it will continue to look for retail space in areas where it does not have a presence.

Sheng Siong was supposed to have opened five outlets this year to grow to a 64-outlet chain before the Covid-19 pandemic derailed plans.

Top photo via