Sheng Siong Group, one of the largest supermarket chains in Singapore, reported a net profit of $7 million for the second quarter ended 30 June 2012 (2QFY2012), down 2% from a year ago (2QFY2011) due to lower gross profit margin and higher operating expenses.
Revenue increased 5.2% to $146.9 million for 2QFY2012 from a year ago, due to the improvement in comparable same store sales and the net increase of 4 stores -- opening of Teck Whye, Thomson Imperial Court, Woodlands Industrial Park, Toa Payoh and New World Centre (Jalan Besar) outlets and the closure of Tanjong Katong supermarket.
Gross profit margin declined 1 percentage point to 21.9% in 2QFY2012, due to the carry-over effect of the 4QFY2011 price war among supermarket operators. Competitive price pressure is less intense, with quarter-on-quarter gross profit margin increasing 1.1 percentage point from 20.8% for 1QFY2012.
Higher operating expenses incurred was attributable mainly to rental and utilities expenditures of new stores, 5-10% adjustment of rental renewal rates for existing stores and salary adjustments.
With stringent cost control measures in place, operating expenses as a percentage of revenue remained stable even though revenue from the new outlets have yet to reach expected turnover levels.
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