Sheng Siong Group's profit surged 49.4% to $29m in Q1

The group saw elevated demand as more people ate at home.

Supermarket operator Sheng Siong Group's net profit surged 49.9% YoY to $29m in Q1, the company revealed in an SGX filing. Over the same period, revenue jumped 30.7% to $328.7m.

Nearly two-thirds (19.7 ppt) of the revenue growth was attributed to comparable same store sales, 9 ppt by new stores and 2 ppt by stores in China.

The company explained that they started the quarter with better Chinese New Year sales, and saw elevated demand thereafter as more people started eating at home and likely loading up their pantry as well.

“When the government raised COVID19’s DORSCON from Yellow to Orange on 7 February 2020 shortly after Chinese New Year, the first round of elevated demand was triggered,” the company said.

Earnings per share rose to 1.91 cents in the quarter, compared with 1.29 cents in 1Q2019.

Gross margin inched up from 26.1% in Q1 2019 to 27% in Q1 2020, with the gains coming mainly from increased sales of house brands. Non-fresh products recorded the biggest gain as sourcing was diversified to cope with the sudden surge in demand.

Meanwhile, administrative expenses increased by $11.9m over the same period mainly due to higher staff costs from longer working hours, additional headcount and higher provision for bonuses because of the better financial performance.

Cash generated from operating activities amounted to $71.5m, mainly because of higher business volume.