MRSGI nets P262M

GAISANO-led Metro Retail Stores Group Inc. (MRSGI), the largest retailer in the Visayas, booked a 24-percent year-on-year growth in net profit to P262 million on higher earnings from its expanding store network.

For the six months ended June, net sales rose by 8 percent year-on-year to P15.91 billion, largely due to increase in sales as a result of opening a new store during the second haft of 2015 and three new stores in 2016. Same store sales grew by 5 percent.

The six-month performance was fuelled by the 14.7 percent growth of the hypermarket segment.

MRSGI also generated higher rental income due to the opening of three new stores, which led to an increase in net leasable space, increase in rental fees due to escalation clauses in lease agreements and the renegotiation of certain concession sales from percentage of revenue to
fixed rent leases. Six-month rental income surged by 105.9 percent year-on-year to P138.6 million for the first semester.

Outside of operating income, interest and other income rose by 181.4 percent year-on-year to P83.3 million, primarily due to the increase in cash balances of bank accounts maintained by the company for working capital requirements and interest income from short term investments and cash equivalents arising from the proceeds of the initial public offering conducted in late 2015.

“Despite challenging conditions, we are encouraged by our bottomline and same store sales growth led by our hypermarket format. This was achieved by our familiarity with the Visayas region and the markets that we serve,” MRSGI chair and chief executive officer Frank Gaisano said in a press statement.


Gaisano added that the company continued to strengthen its position in Visayas by capitalizing on its existing locations and adding new stores in prime locations.
 
MRSGI is investing more than P10 billion for its five-year plan to double the size of its network of stores to 800,000 square meters in terms of gross floor area (GFA).
 
In the first six months of 2016, MRSGI has added around 30,000 square meters of GFA, which included a hypermarket in Eastern Visayas as well as two department stores in UP Town Center and Fairview Terraces in Quezon City, bringing its store network to 49, covering 24 supermarkets, 13 hypermarkets, and 12 department stores.
 
MRSGI also entered into a partnership with Ayala Land for the establishment of its stores in four new Ayala commercial developments — a department store and supermarket in Bacolod City, Negros Occidental; a supermarket in Iloilo City; a supermarket in Cebu City; and a department store and supermarket in Pasig City. The company has also entered into a lease agreement with a local government unit in Negros Oriental to set up its first store in the province.
  
Ramping up its supply chain and logistics modernization program, MRSGI has also recently inaugurated a distribution facility in Cebu with advanced storage and technology features. It has also acquired a new transport fleet — each equipped with advanced real-time monitoring of input and throughput to improve overall cost efficiency.
 
“The continued development and growth in the country this year as well as the resilient OFW remittances and BPO industry are fueling domestic consumption. Aligned with this development, we are ahead of schedule in doubling our footprint by 2020, with more than 40 percent of this target already currently secured,” Gaisano said.