Southeast Asian slowdown: Lacklustre sales drag Super Group's Q2 profit by 27%

Key SEA markets failed to deliver this quarter.

Instant food and beverage brand owner Super Group delivered distinctly disappointing results in Q2, as the group’s operating profit dipped 27% to $17.5m this quarter.

Revenue also decreased 5% YoY to S$131.7m due to lower Branded Consumer sales from slowdown in Southeast Asian markets.

According to David Teo, Chairman and Managing Director of Super Group, “In the first half we delivered a muted performance in a weak revenue environment. We experienced lower Branded Consumer sales due partially to weakened domestic currencies in some of our key Southeast Asian markets such as Thailand and Malaysia. The translation of sales recorded in these currencies into the Singapore Dollar has an adverse impact on reported sales revenue. In addition, weaker consumer demands in markets such as Myanmar and Malaysia also contributed to lower Branded Consumer sales.”

Here’s more from Super Group:

Total sales revenue dipped 5% to S$131.7m for 2Q14 mainly due to lower Branded Consumer (“BC”) sales. BC sales declined 9% to S$83.6m due to slower sales into Southeast Asia (“SEA”) markets. The lower sales into SEA markets were partially offset by higher sales in East Asia (“EA”) markets.

Food Ingredients (“FI”) sales, however, increased by 4% to S$48.0m due primarily to higher sales into SEA markets.

Food Ingredients sales grew in Southeast Asia markets as we continue diversifying our geographic territories for the Food Ingredients business.

Despite ongoing macro-economic headwinds impacting consumer behaviours, we will continue to focus on growth initiatives like branding campaigns, driving product innovations and launching exciting products in our markets. We expect these strategies to deliver long term growth and create value for our shareholders.

We continue to share the fruits of our labour with our shareholders by declaring an interim dividend of 1.0 SG cents per share taking into account that the number of shares in issue has doubled following the Company’s 1-for-1 bonus issue exercise on 4 June 2014.

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