Dairy Farm's 2019 profits skyrocketed 281.84% to $448.53m

Total sales, supported by its investment in Robinsons Retail, climbed 26%.

Dairy Farm popped the champagne in 2019 as its profits grew nearly three-fold (281.84% YoY) to $448.53m (US$323.8m) from $117.46m (US$84.8m) in 2018. 

According to its financial statement, its total sales climbed 26% YoY to $38.33m (US$27.67m) from $30.45m (US$21.98m), supported by its investment in Robinsons Retail in 2018.

The underlying operating profit of Dairy Farm’s subsidiaries was $605.33m (US$437m), 14% YoY lower than 2018, primarily due to social unrest in Hong Kong which disrupted trading in H2 2019. The impact was greatest for Mannings, because of the significant reduction in the number of visitors from the Chinese mainland to Hong Kong.

Ongoing investments in the IKEA store network in the year also reduced profitability. Offsetting these impacts was a significant improvement in profitability in Dairy Farm’s Southeast Asia grocery retail business, as the space optimisation plan took effect.

The sales for Dairy Farm’s business in food and grocery retail slipped 12% YoY to $7.2b (US$5.2b) due to the divestment of the Rustan Supercenters business and its space optimisation plan in Southeast Asia. The sales in its convenience business grew 4% YoY to $3.05b (US$2.2b) thanks to new store growth and strong like-for-like sales in mainland China.

The company also reported decent results for its two other businesses. The sales of its health and beauty division edged up 1% YoY to $4.29b (US$3.1b) due to the consolidation of Rose Pharmacy and strong growth in other Southeast Asian markets. For its home furnishings division, the sales of IKEA climbed 6% YoY, but margins were hit by a combination of currency movements, cost of goods changes and pre-opening costs in support of strong store expansion.

Dairy Farm’s board proposed a final dividend of $0.2 (US$0.145) per share.