Super Group's net profit down 7% to $9.8m

It incurred higher expenses during the quarter.

Food & beverage player Super Group reported not so palatable earnings for the past quarter, with its net profit going down by 7% to $9.8m.

According to the group, this is due mainly by the lower sales revenue, higher selling & distribution (S&D) and higher general & administrative (G&A) expenses

S&D expenses increased to 14% of total sales revenue from increased advertising and promotional (A&P) costs in certain key markets as the group intensified activities to support the roll-out of new products such as ESSENSO Microground Coffee in Thailand and executed marketing activities organized in conjunction with OWL’s 60th anniversary.

Meanwhile, G&A expenses increased to $14.6m (2Q15: $13.8m) from higher personnel costs incurred in the current quarter.

The group is consolidating its non-dairy creamer production facilities by transferring its Singapore facility to the China Wuxi plant in order to streamline its operations, enhance production efficiency and lower operating expenses. Severance pay-outs arising from the consolidation exercise and salary increments contributed to the higher personnel costs.

In terms of revenue, there was a decline of 8% due to lower sales of branded consumer (BC) and food ingredients (FI).

However, in constant currency terms, BC sales will have only dipped by 3% excluding the effects of the depreciation of regional currencies - such as the Thai Baht, Malaysian Ringgit and Chinese Renminbi – which adversely impacted reported Group revenue when sales denominated in these currencies are converted into the Singapore Dollar for consolidation purposes.

Likewise, for FI segment, sales declined 12% to $40.0m due to lower sales into key Southeast Asia markets, primarily Indonesia and the Philippines.

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