Supermarket chain Sheng Siong had a splendid 2020: Its net profit stood at S$139.1 million for the full year ended Dec. 31, 2020, the company said in a Singapore Exchange filing on Feb. 24.

Net profit increased 83.7 per cent year-on-year for financial year (FY) 2020.

Revenue of more than S$1 billion

The supermarket chain's revenue rose by 40.6 per cent year-on-year in the last financial year to S$1.39 billion.

About three quarters of this increase came from existing stores.

About one quarter came from new stores.

Sheng Siong has two outlets in China, but they make up a small portion of the increased sales.

Lim Hock Chee, Sheng Siong group's chief executive officer, said in a media statement: "Despite facing some delays in opening new stores and challenges arising from the outbreak of Covid-19, our expansion plan is still on track."

He added that Sheng Siong now has 63 stores and is still expanding, after opening five new stores and closing one in FY2020.

The total retail area has increased to 571,150 sq ft, he said.

Costs incurred up but not as much

Administrative expenses had increased by S$72.6 million over the 12-month period, due to higher staff headcount and longer working hours for staff, as well as additional monthly salary and higher staff bonuses awarded to them.

But this was partially offset by lower rental and property tax.

Rental decreased as leases were “capitalised as right-of-use assets” and property tax rebates by the government in 2020 contributed to savings, Sheng Siong added.

The group’s balance sheet “remained healthy” with cash of S$253.9 million as at Dec. 31, 2020.

Movement of people restricted, profits soared

Sheng Siong said that demand at its supermarkets rose when Singapore raised its Disease Outbreak Response System Condition (Dorscon) to “Orange” level on Feb. 7.

A circuit breaker restricting people’s movement from April to June also helped sales.

Demand continued to remain elevated even though the circuit breaker was lifted towards the end of the second quarter of 2020.

Dividend payout for investors

Sheng Siong is proposing a final dividend of three cents per share, subject to shareholder approval.

This would take its full-year dividend payout to 6.5 cents per share.

This dividend payout represents 70.5 per cent of the company’s full-year net profit.

Top photo via Google Maps