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Super Group Declines on Profit Outlook: Singapore Mover

Nov. 13 (Bloomberg) -- Super Group Ltd., Singapore’s largest instant coffee maker, slumped for a second day after reporting a slip in third-quarter earnings, posting its biggest two-day decline since the 1997 Asian financial crisis.

Super slid 13 percent to S$3.11 at the close of trading in Singapore. The stock posted a 25 percent two-day drop, the most since Sept. 1, 1997, after reporting third-quarter results on Nov. 11.

“More intense competition will likely sustain, and we have moderated our growth expectations,” Alfie Yeo, an analyst at DBS Vickers Securities, wrote in a note to clients yesterday. “Super’s first mover advantage in Myanmar is eroding now that other competitors such as Nestle are gaining traction in the frontier market. Other Asean markets such as Indonesia and the Philippines have also become more challenging.”

DBS Vickers said it lowered its rating for Super to hold from buy and cut its share-price forecast to S$3.97 from S$5.35 previously. The brokerage also cut its net profit forecast for the maker of Owl and Super Coffeemix brands by between 17 percent and 28 percent for the next three years after Super posted third-quarter earnings that missed estimates, Yeo said.

Super reported on Nov. 11 that third-quarter net income declined 17 percent to S$18.7 million ($15 million) from a year earlier as operating expenses increased.

The stock also posted its fourth day of declines, the longest losing streak in more than a month.

The company said in July it’s seeking its first acquisition in a decade as it battles Nestle SA for a bigger share of the market in Southeast Asia and China.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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