Sheng Siong Group (OV8) Q3 2024 earnings summary

Executive summary

• Revenue for 3Q FY2024 rose 5.0% year-over-year to S$363.2 million, driven by new store openings and improved same-store sales.

• Net profit after tax for 3Q FY2024 increased 12.4% to S$39.1 million, with gross profit margin improving to 31.3%.

• For the nine months ended 30 Sep 2024, revenue grew 4.0% to S$1.08 billion and net profit rose 8.7% to S$109.1 million.

Financial highlights

• Gross profit for 3Q FY2024 was S$113.8 million, up 8.4% year-over-year; gross margin improved to 31.3%.

• Operating income for 3Q FY2024 increased 15.8% to S$45.7 million; profit before tax rose 15.1% to S$47.6 million.

• Basic EPS for 3Q FY2024 was 2.60 cents, up 12.6% year-over-year; 9M FY2024 EPS was 7.25 cents, up 8.9%.

• Cash generated from operations in 9M FY2024 increased to S$152.1 million from S$132.7 million a year ago.

• Cash and cash equivalents stood at S$350.1 million as of 30 Sep 2024, up from S$324.4 million at end-2023.

Outlook and guidance

• Retail market remains subdued but improvement is anticipated for the remainder of FY2024.

• Core inflation in Singapore is expected to decline to around 2% by end-2024, but risks from geopolitical and supply chain disruptions persist.

• Consumer price sensitivity is expected to drive demand for value-focused supermarkets and house brands.

• Labour market tightness and new sustainability requirements are expected to increase operational costs.

• Expansion continues with five new stores in 2024 and further growth planned, including the acquisition of Jelita Property Pte Ltd.