REG - Dairy Farm Intnl Jardine Matheson Hdg - Interim Management Statement

Jardine Matheson HoldingsAnnouncement

11/11/2021 09:35

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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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