Pan-Asian retailer Dairy Farm International Holdings today (4 March) booked a 14% rise in annual profits as its operations in south-east Asia enjoyed strong growth in 2009.
The company, which runs over 5,000 stores across Asia, posted underlying net profit of US$364m – an increase of 14% – as sales climbed 4% to $8.05bn.
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Chief executive Michael Kok said Dairy Farm had “achieved excellent results” in Singapore in 2009, including at its 7-Eleven chain, for which it holds the local licence.
In Malaysia, Dairy Farms was able to record a “good improvement” in earnings, as sales grew and the company focused on controlling costs.
In Indonesia, results from Dairy Farm’s Giant and Hero hypermarkets and supermarkets “improved substantially” in 2009.
However, Dairy Farm derives over 45% of its operating profit from northern Asia and, although earnings from the region also rose, the retailer’s businesses in Hong Kong and mainland China suffered.
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By GlobalDataThe company’s 7-Eleven stores in both territories were affected by restrictions and duties on tobacco sales.
Kok said its 7-Eleven stores in Hong Kong had “a very challenging year”, with comparable-stores sales falling.
In China, Dairy Farm’s 7-Eleven business filed an operating loss, although Kok said “a number of actions” are being taken to improve performance.
Nevertheless, chairman Simon Keswick said Dairy Farm’s “leading retail brands” were popular with shoppers across Asia and had helped bolster the business during the downturn.
“This has underpinned the group’s performance in the recent challenging economic environment, and should provide the basis for further expansion as conditions improve,” Keswick said. “With its secure financial position, Dairy Farm’s prospects for the coming year remain positive.”
