2 biggest profit drivers for Super Group last quarter

Earnings jumped by 25%.

According to CIMB, 1Q’s 25% earnings increase yoy was driven by: 1) rising gross margins and 2) forex gains from appreciating US$.

This increase came in spite of muted branded consumer sales which could have been higher if not for the race riots in Myanmar (~ 20% of sales).

Here's more from CIMB:

Wholesalers are likely to re-stock once the situation subsides. This suggests that there could be ‘deferred’ revenue in 2H. Gross margins are sustainable as raw material prices continue to stay low and could remain that way.

Robust prices have declined after rising slightly this year while palm oil and sugar continue to decrease. 

Ingredients’ successful penetration into Indonesia and Thailand is a big positive. Sales into S.E.A. now form 49% of ingredients’ revenue; it was 33% a year ago when we initiated coverage. Such a demographic makes the business more valuable.