Sheng Siong Group (OV8) Q1 2025 earnings summary

Executive summary

• Revenue for 1Q FY2025 increased by 7.1% year-over-year to S$403.0 million, driven by new store openings and festive sales.

• Net profit rose 6.1% year-over-year to S$38.5 million, with stable net margin and operational strength despite higher costs.

• Opened 2 new stores in 1Q FY2025 and secured 6 more locations, with 4 additional tenders pending.

• Comparable same store revenue in Singapore grew marginally by 0.1%; China revenue up 0.7%.

Financial highlights

• Gross profit increased 10.2% year-over-year to S$122.0 million; gross margin improved to 30.3% from 29.4%.

• Operating expenses increased by 12.4% to S$81.6 million; administrative expenses up 8.8% to S$15.8 million; selling and distribution expenses up 13.3% to S$65.8 million.

• Other income rose 18.1% to S$4.7 million, mainly from higher rental income and government grants.

• Cash and cash equivalents increased to S$366.9 million as at 31 March 2025.

• Cash flow from operating activities declined by S$10.1 million year-over-year due to higher receivables and vendor payments.

Outlook and guidance

• Consumers remain cautious amid low inflation, global uncertainties, and macroeconomic headwinds, favoring value-driven supermarkets.

• Government support measures, such as CDC vouchers, are expected to sustain consumer spending and benefit supermarket sales.

• Group will focus on supply chain expansion, operational efficiency, automation, and targeted store growth.

• Prudent approach in China, focusing on improving existing store performance.

• Plans to open 6 new stores by Q3 FY2025, with 4 more tenders pending.