Sheng Siong makes S$46.2 million net profit in Q2 because of Covid-19, more than double Q1

People who bought Sheng Siong shares getting a dividend.

Belmont Lay | July 30, 2020, 03:21 PM

Supermarket chain Sheng Siong more than doubled its net profit in the second quarter of 2020 to S$46.2 million, up from S$18.4 million a year ago.

Revenue for the three months ended June 30 rose 75.8 per cent to S$418.7 million.

Sheng Siong's earnings per share rose to 3.07 cents. It was 1.23 cents a year ago.

The company declared an interim cash dividend of 3.5 cent per share, double what it paid out a year ago.

Gross margin improved to 28.1 per cent, up from 27.4 per cent a year ago.

This was driven by selling prices underpinned by strong demand, diversification in sourcing resulting in stable input prices, and higher sales of house-brand items that give a higher gross margin.

Sheng Siong's strong showing is also driven by government grants.

Revenue from its stores in Kunming in China continued to grow at a healthy pace.

Sheng Siong opened an outlet in Sengkang West in July 2020 and will open an outlet in Potong Pasir.

It has also successfully put in a bid for another new outlet at Tampines.

It expects the elevated demand caused by Covid-19 to ease with the gradual reopening of the economy.

Competition from e-commerce platforms gaining better visibility during the circuit breaker could pose as a challenge.

Sheng Siong shares closed at S$1.73.