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Revenue at Dairy Farm Goes Up

dairy farm logo Dairy Farm International Holdings Limited (SGX: D01), a leading pan-Asian retailer, saw its revenue go up by 10% from the previous year, to US$6 billion for the six months that ended 30 June 2013 (1H 2013). This was reported after market closed yesterday.

Dairy Farm’s Hong Kong operations performed well, but difficult markets in Malaysia and Singapore led to increased costs and reduced margins, resulting in a modest decline overall in earnings. Progress was made on building brand strength in key markets, including the absorption of the Shop N Save brand into Giant in Singapore.

The gross margins for 1H 2013 was at 29.4% while that in 1H 2012 was slightly higher at 29.7%. The profit attributable to shareholders, on the other hand, dipped 6% to US$229 million for 1H 2013. The profit for 1H 2013 included a non-trading gain of US$1 million, arising from the disposal of a small piece of surplus land in Malaysia. The net profit margin was at 4.5%, compared to 5.1% in the previous year.

The diluted earnings per share came up to be 16.93 cents while that in the previous year was 17.96 cents.

The company has a strong balance sheet. As of 30 June 2013, total borrowings is at US$346.1 million while it has a cash hoard of US$766.7 million. The cash flow from operation for 1H 2013 was at US$238.7 million while capital expenditure was at US$152.6 million.

Dairy Farm is paying an interim dividend of 6.50 US cents per share, unchanged from the previous year.

Ben Keswick, Chairman of Dairy Farm, said, “While trading conditions remain challenging in some areas, progress is being made in addressing margin pressures and the Group continues to invest for long-term growth in all its key businesses. After a weaker first half, the outlook is for a modest improvement in the remainder of the year.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.