As it reports another mixed performance across its pan-Asian portfolio, Dairy Farm emphasises its investment in stores, infrastructure, supply chain, and people.
Group results headlines
- Sales increased by 5% to US$6.3bn
- Like for like sales growth in most major markets
- All divisions reporting sales increase in H1
- Underlying profit behind last year
Tough challenges for food business in south east Asia
Whilst Dairy Farm's domestic market Hong Kong delivered a satisfactory performance, and its Malaysian saw improvements in sales and profits, it faced significant challenges in both Singapore and Indonesia.
In Singapore, profit decline was attributed to construction activity impacting several key stores in this period. Rising costs continued to weigh down results in Indonesia, exaggerated by the currency effect. Read more about Dairy Farm's Indonesian results here.
Mixed results for health and beauty banners
The Group's health and beauty operations under the Mannings banner in Hong Kong and Macau continued to perform well, and operations in China saw good improvements following range reviews and store rationalization.
However, the same trading challenges the food business faced in Singapore and Indonesia were reflected in Guardian banner health and beauty operations, and Malaysia also saw profit decline.
Divestment of Indian operations, further investment in the Philippines
Dairy Farm announced it has sold its interest in India, the Foodworld grocery chain, and Health and Glow health and beauty stores, to its local partner.
The Group has increased its stake in its joint venture with Rustan's in the Philippines to 66%, following its successful partnership since 2012.
Investing for long term growth
Looking ahead, Dairy Farm plans to make significant investments in its existing stores, IT infrastructure and supply chain, and building its people capability. This will position the business for long term growth, despite ongoing challenges in key markets in the short term.