Super Group bombarded by not-so-super Southeast Asian sales

A flimsy ASEAN economic outlook isn’t helping.

The supply chain group’s topline declined by 7%, and its Southeast Asian market proved to be its glaring Achilles’ heel.

According to analysts from DBS, key contributors of the drag were Malaysia (due to its weaker currency), Thailand and Philippines (no A&P activities) for its Branded Consumer segment, and Indonesia (weak economy and currency) for Food Ingredient sales.

“Gross margins were sequentially lower on higher direct depreciation from manufacturing facility expansion. Opex was also lower on marketing activities and higher depreciation,” DBS said.

Meanwhile, don’t expect things to get better for its ASEAN market soon, as DBS says general consumption is expected to be lackluster on back of slower regional GDP growth.

“The region is still marred by weaker currencies and poor consumer confidence. Consumer confidence is low particularly in Malaysia, Thailand and Indonesia.

Nonetheless, with new product launches, we expect volume sales to at least pick up in the initial phases of each launch on channel stocking. That should support growth and mitigate consumption weakness in ASEAN,” DBS said.