Sheng Siong Group (OV8) Q3 2024 earnings summary

Executive summary

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

• Net profit for 3Q FY2024 rose 12.4% year-over-year 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$1,077.4 million and net profit rose 8.7% to S$109.1 million.

• Gross and net profit margins improved, reflecting stable profitability despite competitive pressures.

Financial highlights

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

• Net profit margin for 3Q FY2024 was 10.8%, up 0.7 percentage point year-over-year.

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

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

• Revenue per square foot for 9M FY2024 was S$1,668, up from S$1,646 in 9M FY2023.

Outlook and guidance

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

• Plans to operate the newly acquired Toa Payoh store by year-end, with four more store tenders pending.

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

• Persistent inflation risks, labour market tightness, and new sustainability requirements are expected to increase operational costs.

• China operations posted a loss in 3Q FY2024 due to new store costs but remained profitable for 9M FY2024.