TIDMDFI TIDMJAR
RNS Number : 0899S
Dairy Farm International Hldgs Ltd
11 November 2021
Announcement
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
Interim Management Statement
11th November 2021 - Dairy Farm International Holdings Limited
today issues its Interim Management Statement for the third quarter
of 2021.
The Group's overall performance in the third quarter continued
to be significantly affected by the COVID-19 pandemic and
underlying losses reported for key associate Yonghui. As
anticipated at the half-year, the Group's third quarter and
year-to-date results were, therefore, well below the equivalent
periods in 2020, when performance benefitted from both panic buying
and government support.
Like-for-like sales for the Group's Grocery Retail businesses
were lower in the third quarter than in the same period last year,
as customer buying behaviours continued to normalise from a high
sales base in 2020. Third quarter profitability for the division
reduced compared to the same period last year, due to a combination
of lower sales and the absence of government subsidies. The Group
nevertheless remains encouraged by the progress made with the
transformation of the business, with strong growth in underlying
profitability in the third quarter of 2021 compared with the third
quarter of 2019, before the onset of the pandemic.
The Group's Convenience business continued to report
like-for-like sales growth, driven primarily by strong growth in
Hong Kong and Macau. Like-for-like sales in Southern China and
Singapore were impacted by COVID-19 outbreaks and related
restrictions. Underlying profitability in the third quarter
improved relative to the first half of the year.
Like-for-like sales growth for the Group's Health and Beauty
businesses improved in the third quarter relative to the first
half, driven predominantly by Mannings Hong Kong and Guardian
Singapore. However, reduced levels of government support impacted
profitability in the quarter compared to the same period last year.
More generally, relative to historical trends, profitability
continued to be significantly affected by an ongoing lack of
tourist custom and reduced footfall in malls.
Sales in the Home Furnishings business reduced compared to the
equivalent period last year. Like-for-like sales in the quarter
were impacted by government restrictions on store trading and the
impact of ongoing supply chain disruptions. Overall profitability
for the Home Furnishings business was lower, due to a combination
of higher pre-opening expenses for new store openings, lower
profitability in Indonesia - where government restrictions on
trading were most severe - and the sales impact from lower levels
of product availability.
The profitability of Maxim's, the Group's 50%-owned associate,
grew in the third quarter compared to the same period last year,
due to stronger levels of restaurant patronage, particularly in
Hong Kong, as well as encouraging levels of mooncake sales during
the Mid-Autumn Festival. Yonghui's sales in the third quarter were
ahead of the prior year, but increased levels of competition
continued to substantially impact margins and the Group's
profitability. Robinsons Retail reported strong growth in net
income for the third quarter with continued improvement in
quarterly performance indicative of the recovery of the Philippines
economy.
Despite the challenges posed by COVID-19, the Group has
continued to execute its key transformation and growth initiatives
in the quarter. In both Hong Kong and Singapore, the Group has
continued to upgrade its upscale store network. As part of this
initiative, an upgraded Marketplace store has seen the introduction
of the world-first 'IKEA Close to You' store-in-store concept.
During the quarter, IKEA Indonesia also opened its fourth store and
has now more than doubled the total area of its store network since
the start of the year. In addition, in October the Group introduced
a new 'Wellcome Fresh' concept store - the largest supermarket in
Hong Kong - offering the best elements of traditional wet markets
and modern retail.
In May, PT Hero, the Group's 89.3% owned subsidiary in
Indonesia, announced that, following a strategic review, it would
be pivoting its trading operations away from the Giant banner by
increasing investment in its strong brands of IKEA, Guardian and
Hero Supermarkets. This change in strategy is a decisive and
necessary response to changing market dynamics, particularly given
the move away from the hypermarket format by Indonesian consumers
in recent years. During the third quarter, PT Hero successfully
executed the restructure of Giant in Indonesia. As a result, six
stores have been successfully converted to the Hero banner, whilst
a number of other sites are planned for future IKEA conversion. A
number of stores have been successfully divested and PT Hero
remains in active discussions with third parties to divest further
stores.
The Group expects the remainder of 2021 to be challenging.
Despite the ongoing challenges posed by COVID-19, the Group remains
encouraged by the momentum of its multi-year transformation and is
confident that it is delivering sustainable improvements to the
business over time which will drive medium- to long-term
growth.
DFI Retail Group is a leading pan-Asian retailer. The Group,
together with its associates and joint ventures, operates over
10,000 outlets - including supermarkets, hypermarkets, convenience
stores, health and beauty stores, home furnishings stores and
restaurants - employing some 230,000 people, and had total sales in
2020 exceeding US$28 billion. The Group's parent company, Dairy
Farm International Holdings Limited, is incorporated in Bermuda and
has a primary listing on the London Stock Exchange, with secondary
listings in Bermuda and Singapore. DFI Retail Group is a member of
the Jardine Matheson Group.
- end -
For further information, please contact:
Dairy Farm Management Services Limited
Christine Chung (852) 2299 1056
Brunswick Group Limited
Sunitha Chalam (852) 3512 5050
This and other Group announcements can be accessed through the
Internet at 'www.dairyfarmgroup.com'.
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END
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