DFI Retail Group posts 60 per cent uplift in profit, despite food sales decline

(Source: DFI Retail Group)

Hong Kong-based DFI Retail Group’s profit rose 60 per cent year-on-year for the first quarter, driven by better performance across most subsidiaries.

At the food retail division – including Wellcome and Food World in Hong Kong and Cold Storage in Singapore – like-for-like sales slightly decreased but overall pre-tax profit increased thanks to disciplined margin and cost control. The segment faced headwinds in North Asia amid reduced consumer spending, offset by positive festive trading performance in Southeast Asia.

The convenience division’s like-for-like sales improved compared to last year, supported by good performance in the company’s 7-Eleven stores in Macau, South China and Singapore, while profit more than doubled.

Health and beauty – led by Guardian – posted high-single-digit growth in like-for-like sales and a 20 per cent uplift in profit, attributed to  tourism recovery and strong in-store execution.

Home furnishings (Ikea) saw significantly lower profit due to the challenging macroeconomic environment. The Hong Kong and Indonesia markets, specifically, were negatively affected by high-interest rates, a dampened housing market and higher levels of outbound travel.

The group agreed to divest its Hero supermarket business unit in Indonesia last month. The transaction, forecast to be slightly earnings accretive to the group, will complete in June.

For the full year, the group continues to expect an underlying profit to be between US$180 million and US$220 million.

DFI, together with its associates and joint ventures, operates some 11,000 outlets in pan-Asia. The group and its associates and joint ventures reported total revenue of US$26 billion last year.

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.