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3 Things Investors Should Know About Dairy Farm International Holdings Ltd’s 2017 First Half Earnings

Dairy Farm International Holdings Ltd (SGX: D01) is a pan-Asian retailer with over 6,600 outlets. The company’s stores are in a wide variety of formats, including supermarkets, hypermarkets, convenience stores, pharmacies, home furnishing stores, and restaurants.

In Singapore, Dairy Farm is the owner of stores such as GuardianCold StorageGiant, and 7-Eleven.

In early August, the company released its 2017 first half results. Let’s look at three useful pieces of information investors may want to know from the announcement:

1. The overall result

The table below shows some important numbers from Dairy Farm’s income statement for the first halves of 2017 and 2016:


Source: Dairy Farm 2017 first half earnings announcement

Although the retailer’s revenue was flat, both profit attributable to shareholders and underlying profit attributable to shareholders grew. (Underlying profit strips out one-off gains.)

Dairy Farm’s revenue was impacted by its Supermarket and Hypermarket business, which offset growth from all the other segments. Regarding its stronger bottom-line, this is what Dairy Farm had to say:

“Overall profits increased with strong results from Yonghui and Maxim’s in addition to good performances from the Health and Beauty and Home Furnishings Divisions more than compensating for the lower earnings in the Food Division.”

2. Segmental performance

The chart below shows the changes in revenue and operating profit that each of Dairy Farm’s business segments posted in the first half of 2017. In descending order, the symbols in the chart represent the following segments: Supermarket & Hypermarket; Convenience Stores; Health and Beauty; Home Furnishing; Restaurants and Yong Hui.


Source: Dairy Farm 2017 first half earnings presentation

It’s obvious to note that all of Dairy Farm’s businesses – with the exception of the Supermarkets & Hypermarkets business – reported growth in the first half of 2017.

3. What lies ahead

As for what to expect for the rest of 2017, Dairy Farm had the following slide in its earnings presentation:


Source: Dairy Farm 2017 first half earnings presentation

With a new CEO, Ian McLeod, at the company, investors may want to pay attention to his strategies for growing Dairy Farm.

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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 Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool Singapore has a recommendation for Dairy Farm.