SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
A. Consolidated Statement of Profit or Loss and Other Comprehensive Income
The Group | |||
1st Quarter Ended | |||
31 Mar 2024 | 31 Mar 2023 | Change | |
S$'000 | S$'000 | +/ (-)% | |
Reclassified | |||
Revenue | 376,194 | 356,545 | 5.5% |
Cost of sales | (265,526) | (253,714) | 4.7% |
Gross profit | 110,668 | 102,831 | 7.6% |
Other income | 3,998 | 2,745 | 45.6% |
Selling & Distribution expenses | (58,073) | (54,175) | 7.2% |
Administrative expenses | (14,499) | (12,541) | 15.6% |
Results from operating activities | 42,094 | 38,860 | 8.3% |
Finance income | 3,343 | 2,741 | 22.0% |
Finance expenses | (1,258) | (1,043) | 20.6% |
Profit before tax | 44,179 | 40,558 | 8.9% |
Tax expense | (7,851) | (7,206) | 9.0% |
Profit for the period | 36,328 | 33,352 | 8.9% |
Other comprehensive income | |||
Item that is or may be reclassified | |||
subsequently to profit or loss: | |||
Foreign currency translation differences | |||
- foreign operations | 160 | 33 | 384.8% |
Total comprehensive income for the | |||
period | 36,488 | 33,385 | 9.3% |
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
The Group | |||
1st Quarter Ended | |||
31 Mar 2024 | 31 Mar 2023 | Change | |
S$'000 | S$'000 | +/ (-)% | |
Profit net of tax for the period | |||
attributable to: | |||
Owners of the Company | 36,319 | 33,243 | 9.3% |
Non-controlling interest | 9 | 109 | (91.7%) |
36,328 | 33,352 | 8.9% | |
Total comprehensive income | |||
attributable to: | |||
Owners of the Company | 36,415 | 33,263 | 9.5% |
Non-controlling interest | 73 | 122 | (40.2%) |
36,488 | 33,385 | 9.3% |
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
B. Statements of Financial Position
Assets
Property, plant and equipment
Right-of-use assets
Investment in subsidiaries
Non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Equity Share capital Merger reserve
Foreign currency translation reserve Statutory Reserve
Accumulated profits
Equity attributable to owners of the Company
Non-controlling interest
Total equity
Liabilities
Deferred tax liabilities
Lease liabilities
Non-current liabilities
Trade and other payables
Current tax payable
Lease liabilities
Current liabilities
Total liabilities
Total equity and liabilities
The Group | The Company | |||
31 Mar 2024 | 31 Dec 2023 | 31 Mar 2024 | 31 Dec 2023 | |
S$'000 | S$'000 | S$'000 | S$'000 | |
282,779 | 283,658 | - | - | |
101,692 | 101,797 | - | - | |
- | - | 82,261 | 82,261 | |
384,471 | 385,455 | 82,261 | 82,261 | |
87,968 | 91,802 | - | - | |
24,606 | 28,535 | 202,333 | 202,317 | |
352,329 | 324,401 | 326 | 354 | |
464,903 | 444,738 | 202,659 | 202,671 | |
849,374 | 830,193 | 284,920 | 284,932 | |
235,373 | 235,373 | 235,373 | 235,373 | |
(68,234) | (68,234) | - | - | |
(599) | (695) | - | - | |
218 | 218 | - | - | |
363,432 | 327,113 | 49,106 | 49,159 | |
530,190 | 493,775 | 284,479 | 284,532 | |
3,276 | 3,203 | - | - | |
533,466 | 496,978 | 284,479 | 284,532 | |
2,664 | 2,306 | - | - | |
66,562 | 66,920 | - | - | |
69,226 | 69,226 | - | - | |
181,021 | 199,943 | 436 | 393 | |
30,513 | 29,638 | 5 | 7 | |
35,148 | 34,408 | - | - | |
246,682 | 263,989 | 441 | 400 | |
315,908 | 333,215 | 441 | 400 | |
849,374 | 830,193 | 284,920 | 284,932 |
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
C. Consolidated Statement of Cash Flows
Operating activities
Profit for the period
Adjustments for:
Depreciation of:
- property, plant and equipment
- right-of-useassets
(Gain)/loss on disposal of property, plant and equipment Unrealised exchange loss/(gain)
Interest income Interest expense Tax expense
Changes in:
- inventories
- trade and other receivables
-
trade and other payables
Cash generated from operations Taxes paid
Cash flows from operating activities
Investing activities
Proceeds from disposal of property, plant and equipment Purchase of property, plant and equipment
Interest received
Cash flows (used in)/from investing activities
Financing activities
Interest paid
Payment of lease liabilities
Cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Effect of exchange rate changes on balances held in foreign currencies
Cash and cash equivalents at end of the period
The Group
1st Quarter ended
31 Mar 2024 31 Mar 2023
S$'000 S$'000
36,328 33,352
4,405 | 4,493 | |
9,019 | 8,572 | |
(1) | 2 | |
202 | (3) | |
(3,343) | (2,741) | |
1,258 | 1,043 | |
7,851 | 7,206 | |
55,719 | 51,924 | |
3,834 | 12,866 | |
3,929 | 7,228 | |
(18,922) | (45,791) | |
44,560 | 26,227 | |
(6,618) | (10,332) | |
37,942 | 15,895 | |
6 | 68 | |
(3,455) | (2,023) | |
3,343 | 2,741 | |
(106) | 786 | |
(1,194) | (990) | |
(8,620) | (8,108) | |
(9,814) | (9,098) | |
28,022 | 7,583 | |
324,401 | 275,499 | |
(94) | 32 | |
352,329 | 283,114 |
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
D. | Notes to Consolidated Financial Statements | |||
1. | Significant items | |||
The Group | ||||
1st Quarter ended | ||||
Note | 31 Mar 2024 | 31 Mar 2023 | ||
S$'000 | S$'000 | |||
Depreciation of property, plant and equipment | (4,405) | (4,493) | ||
Depreciation of right-of-use assets | 1 | (9,019) | (8,572) | |
Gain on disposal of property, plant and equipment | (1) | (2) | ||
Staff costs | 2 | (55,705) | (50,927) | |
Contribution to defined contribution plans, included | ||||
in staff costs | (3,804) | (3,490) | ||
Interest income | 3 | 3,343 | 2,741 | |
Interest expense | 4 | (1,258) | (1,043) | |
Finance income/(expense), net | 2,085 | 1,698 | ||
Other income: | ||||
Rental income | 929 | 964 | ||
Sale of scrap materials | 536 | 464 | ||
Government grants | 5 | 947 | 653 | |
Exchange gain | 410 | 311 | ||
Miscellaneous income | 6 | 1,176 | 353 | |
3,998 | 2,745 | |||
Notes
- New leases of new stores in Singapore and China in FY2023 and FY2024 resulted in higher depreciation of right-of-use assets.
- The increase in staff costs was due to the increment of staff variable bonuses owing to better financial performance.
- Higher interest income resulted from more fixed deposits being placed during 1Q FY2024.
- Interest expense pertained to the interest on lease liabilities.
- Higher government grants mainly resulted from receipts of grant related to an IT project and the Progressive Wage Credit Scheme.
- Higher miscellaneous income was mainly attributed to the advertisement income received from suppliers and the collections from the Disposable Carrier Bag Charges which will be donated to social and/or environmental causes.
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
2. Reclassification
During the financial year ended 31 December 2023, the Group reclassified certain expenses to reflect the economic substance of the expenses. The following table summarises the impact of the reclassification of the relevant items:
As previously | After | ||
announced in | reclassification for | ||
1Q FY2023 | Reclassification | 1Q FY2023 | |
$'000 | $'000 | $'000 | |
Other gains | 2,434 | 311 | 2,745 |
Selling and distribution expenses | (1,879) | (52,296) | (54,175) |
Administrative expenses | (63,241) | 50,700 | (12,541) |
Other expenses | (1,285) | 1,285 | - |
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
E. Performance Review of the Group
1. Consolidated Statement of Profit or Loss and Other Comprehensive Income Overview
The Group | |||
1st Quarter ended | |||
31 Mar 2024 | 31 Mar 2023 | Increase | |
S$'000 | S$'000 | % | |
Sales | 376,194 | 356,545 | 5.5% |
Profit for the period | 36,328 | 33,352 | 8.9% |
For the first 3 months ended March 2024, revenue increased by 5.5% year-on-year to S$376.2 million mainly attributed to the longer sales period prior to Lunar New Year which fell in February 2024 as compared to last year. The net profit for the period increased by 8.9% to S$36.3 million.
Comparable same store revenue in Singapore for 1Q FY2024 increased by 8.0%, offset by a 2.6% revenue reduction from the new stores. China's revenue increased marginally by 0.1%.
31 Mar 2024 | 31 Mar 2023 | |
Number of stores | 70 (Singapore) | 68 (Singapore) |
5 (China) | 4 (China) | |
Retail area (sq ft) * | 623,677 | 613,075 |
Revenue for the period (S$'000) | S$376,194 | S$356,545 |
* Singapore's operations only. |
Revenue | No. of | Revenue |
stores | 1Q FY2024 vs 1Q FY2023 | |
New stores - Singapore # | 3 | (2.6%) |
Comparable same store - Singapore | 67 | 8.0% |
China | 5 | 0.1% |
Total | 75 | 5.5% |
- New stores consist of 2 that opened in FY2023 and 1 that opened in 1Q FY2024.
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
Gross Profit and Margin
1Q FY2024 | 1Q FY2023 |
S$110.7 million | S$102.8 million |
29.4% | 28.8% |
Gross profit increased to S$110.7 million compared to 1Q FY2023. Gross profit margin increased by 0.6% due to the improvement in sales mix but also to address the rising staff costs and utility expenses.
Other Income
Other income increased to S$4.0 million in 1Q FY2024 from S$2.7 million in 1Q FY2023. The variance analysis is provided on page 5.
Administrative Expenses
Administrative expenses for 1Q FY2024 increased by 15.6% or S$2.0 million from S$12.5 million to S$14.5 million. The variance of the expenses is tabled below:
1Q FY2024 vs | |||
1Q FY2023 | |||
S$'million | Remarks | ||
Administrative Staff cost | 1.0 | Staff | variable bonuses increased due to better |
financial performance. | |||
Others | 1.0 | ||
Total | 2.0 | ||
Selling and Distribution Expenses
For 1Q FY2024, selling and distribution expenses increased by 7.2% or S$3.9 million to S$58.1 million from S$54.2 million in 1Q FY2023. The fluctuation of the expenses is tabled below:
1Q FY2024 vs | |||
1Q FY2023 | |||
S$'million | Remarks | ||
Supermarket and | 3.0 | Staff variable | bonuses increased due to better |
Operations Staff cost | financial performance. | ||
Others | 0.9 | ||
Total | 3.9 | ||
Tax Expenses
The effective tax rate of 1Q FY2024 is 17.8%. It is higher than the corporate tax rate of 17.0% as certain expenses are not tax deductible.
Foreign Operations - China
China operations accounted for 2.3% of the total revenue in 1Q FY2024, and are profitable for the quarter.
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SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
Consolidated Statement of Financial Position
Current assets increased by S$20.2 million to S$464.9 million as at 31 March 2024. It was mainly due to S$27.9 million increase in cash and cash equivalents. Trade and other receivables declined by S$3.9 million primarily due to less prepayment made for the purchases. Inventories reduced by S$3.8 million because of the higher sell off of stock prior to Lunar New Year.
Non-current assets decreased by S$1.0 million. Property, plant and equipment decreased by S$0.9 million due to the depreciation of S$4.4 million, offset by the additions of S$3.5 million. Right-of-use assets remain largely unchanged.
As of 31 March 2024, current liabilities were reduced by S$17.3 million to S$246.7 million from S$264.0 million reported end of FY2023. This is largely due to the decrease in the trade and other payables by S$18.9 million to S$181.0 million as the accrued staff bonuses were paid in 1Q FY2024.
Consolidated Statement of Cash Flows
Cash generated from operations was S$37.9 million in 1Q FY2024, up by S$22.0 million registered a year ago, partially due to more payments being made to the vendors in 1Q FY2023. Additionally, the Directors' incentive bonus for FY2023 was only paid in April 2024.
Owing to the higher fixed deposit placements, an interest income of S$3.3 million was recorded during the quarter. The Group used S$3.5 million to purchase fixed assets. Cash flow used in investing activities was S$0.1 million.
The S$9.8 million used in financing activities for 1Q FY2024 comprised lease payments of S$8.6 million and interest paid of S$1.2 million.
The Group's cash balance increased by S$27.9 million to S$352.3 million as at 31 March 2024 from S$324.4 million reported end of FY2023.
Looking Forward
Inflation in Singapore is expected to remain elevated through 2024. GST hikes, rising public transport fares, electricity and water tariffs, and labor costs continue to add pressure to the inflation (1). Increasing costs of living may prompt consumers to adopt cost-cutting measures, such as preparing meals at home, shopping at supermarkets that provide more value-for-money, and opting for more affordable house brand products. Consumers who used to shop at high-end markets may now turn to budget-friendly supermarkets to manage their expenses. The Assurance Package and the government's continued commitments to defray the GST hike for lower to middle-income groups, will continue to bolster consumer spending, giving supermarket retailers a boost.
The risk of supply chain disruption persists. The attack on the Red Sea has caused shipping companies to avoid the Suez Canal, opting for longer trade routes at higher costs. The prolonged drought in the Panama Canal disrupted global trade. Erratic weather events continue to increase climate-related risks to threaten the supply chain and agriculture yields, potentially driving up food prices. Heavily relying on international trade, Singapore is vulnerable to these disruptions. To mitigate the risk, the Group will continue to diversify our sources of supply and collaborate closely with our suppliers.
9
- https://www.businesstimes.com.sg/singapore/economists-expect-unchanged-monetary-policy-january-even-december-core-inflation-edges-33
SHENG SIONG GROUP LTD.
1Q FY2024 Business Update
Singapore's labor market remains tight, presenting a significant challenge for the retail industry due to a shortage of manpower, putting an upward pressure on labor costs as the industry strives to attract and retain qualified personnel. Enhanced sustainability and climate reporting obligations are also expected to increase operating costs.
Competition in the supermarket remains keen. Higher operating costs and aggressive promotional activities by competitors may result in lower margins.
The Group will continue its effort to improve its sales mix and focus on strengthening its core competencies to improve operational efficiency and productivity.
The Group opened two new stores in FY2023, and one new store in 1Q 2024, and is expecting the announcement on the results of four tenders that closed in February 2024. In early April, we expanded the retail floor space of one of our stores by connecting the newly leased space at Blk 159 Bukit Batok to our existing store at Blk 154 Bukit Batok. The supply pipeline of HDB housing is strong. It is expected that HDB will be putting up another six stores for tender in the next six months(2). The Group remains proactive in seeking new store opportunities, particularly in areas where it currently lacks a presence. In China, plans are underway to open the 6th store in 2Q FY2024.
Lim Hock Chee
Chief Executive Officer
25 April 2024
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- https://place2lease.hdb.gov.sg/public/upcoming-units
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Sheng Siong Group Ltd. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 12:39:05 UTC.