Super Group’s Q1 earnings tumble 15% to 11.6m

It was slammed by forex losses, fair value losses.

Super Group net profit for the first quarter of 2016 dropped 15% to $11.6m, as forex losses and fair value losses took a toll on the company.

According to the company’s announcement, Super Group suffered a $700,000 forex loss on top of another $700,000 fair value loss on securities. In addition, the company by a higher effective tax rate of 24% during the quarter, compared to 1Q15’s 20%.

The group asserts, however, that despite the weaker profit, net cash from operating activities jumped from 1Q15’s $5.6m to $26.5m thanks to Super group’s generative business model. Consequently, Super Group’s cash and cash equivalents came in at $143.3m as at 31 March 2016.

Meanwhile, revenue slipped 2% on reduced branded consumer (BC) and food ingredients (FI) sales. BC sales dipped 2% to $83m, while FI sales inched back 3% to $36.5m in Q1. In addition, weaker regional currencies like the MYR and THB also weighed down Super Group’s revenue in the quarter.

Despite the lower profit achieved in the current quarter, net cash from operating activities increased to S$25.5m (1Q15:S$5.6m). The improvement in operating cash flows reflects the Group’s cash generative business model. Consequently, the Group’s cash and cash equivalents rose to S$143.3m as at 31 March 2016.

Looking forward, the group asserts it expect increased earnings and business growth thanks as it phased the roll-out of more new products. Further, Super Group will continue to grow its business beyond Asia, increasing market penetration of its higher premium products like freeze-dried coffee, botanical herb extract, and nutritional oil powders.