SUPERMARKET and retail store operator DFI Retail Group’s underlying profit more than doubled year on year to US$75.6 million for H1 ended June, from US$33.3 million in the year before.
Its total H1 profit, which includes non-trading items, stood at US$95.1 million, up from US$8.2 million the year prior. This came even as its half-year revenue fell 4 per cent to US$4.4 billion.
On the back of this result, DFI declared an interim dividend of 3.5 US cents per share, an increase of 17 per cent compared to the same period last year.
The company’s food division’s revenue fell marginally to US$1.6 billion, after excluding the impact of the divestment of its Malaysia food business last year. However, thanks to an improved sales mix and cost control, divisional profit increased to US$26 million.
“While Singapore food like-for-like sales performance continued to be affected by challenging consumer sentiment, a better product margin mix and strong cost control significantly improved profitability,” DFI said in its earnings statement.
In the convenience division, profit grew 73 per cent as a “favourable product mix shift towards non-cigarette categories supported margin accretion and profit growth across all markets”, it added.
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Sales for the health and beauty division were relatively stable, with profit up 3 per cent. However, Hong Kong performance in Q2 was hit by factors such as outbound travel during the Easter and Qing Ming Festival holidays, and weaker performance from tourist cluster stores due to bad weather conditions.
That said, health and beauty retailer Guardian achieved “solid” like-for-like sales growth in H1, driven by “effective in-store execution and promotions”, particularly in Indonesia.
In the home furnishings division, the challenging residential property market remains an overhang on the sales performance, said DFI.
Hong Kong and Indonesia sales were hit by subdued property market sentiment and reduced customer traffic. Ikea Taiwan also reported slightly lower like-for-like sales than the prior year, due to temporary disruption caused by the Hualien earthquake in early April.
Looking ahead, DFI reiterated its guidance for 2024 underlying profit to be between US$180 million and US$220 million.
However, the company expects H2 to “remain challenging, given macro uncertainties, shifting customer behaviours and increased levels of outbound travel, particularly into the Chinese mainland from Hong Kong”.
In response, DFI plans to tap into larger addressable markets with earnings-accretive opportunities and accelerate monetisation initiatives from its yuu Rewards loyalty programme.
DFI ended Thursday at US$1.74, down 0.6 per cent or US$0.01.
