Supermarket operator Sun Art Retail Group (6808.HK) saidon Sunday it expects to post a loss of 300 million yuan to 50 million yuan ($51 million) for its fiscal year through March, falling into the red after reporting a profit of 386 million yuan the previous year.
The company said its gross margin edged slightly higher during its latest fiscal year, but its overall profitability came under pressure as both transaction volume per ticket and average selling prices declined, leading to lower revenue and reduced gross profit. A drop in its shopping mall rental income also weighed on the company.
Despite sinking into the red, the company, which operates the RT-Mart chain of hypermarkets, said its operating cash flow and adjusted EBITDA remained strong. It added it will continue to advance its omnichannel strategy, strengthen localized operations and customer experience, and enhance product competitiveness by expanding centralized procurement, deepening supplier partnerships, and developing private-label brands.
Sun Art shares opened lower on Monday and were trading at HK$1.43 by the midday break, down 7.14%. The stock has fallen more than 17% so far this year.
By Lee Shih Ta
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