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RRHI bottom line up 2% despite inflation woes

/ 05:04 AM March 20, 2019

Gokongwei-led Robinsons Retail Holdings Inc. (RRHI) posted a 2-percent increase in its net profit last year to P5.1 billion as sales from its growing store network improved despite a high-inflation environment.

Excluding earnings from its 40-percent stake in Robinsons Bank, foreign exchange adjustments and interest income from bonds alongside non-recurring expenses, RRHI’s core net profit last year grew by 6.2 percent to P5 billion.

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The growth in earnings was primarily attributed to the 5-percent growth in operating income, in turn supported by strong same store sales growth (SSSG) across all formats.

RRHI’s consolidated net sales improved by 15.1 percent to P132.7 billion, driven by the blended SSSG of 5.9 percent, the sales contribution from the 104 net new stores opened in 2018 and the one-month consolidation of upscale grocery operator Rustan Supercenters Inc.

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The supermarket segment continued to account for the biggest share in sales at 47 percent in 2018. Its share to total net sales is expected to further rise this year due to the first full-year consolidation of Rustan.

The higher SSSG in 2018 was attributed to the rise in disposable income as a newly implemented tax reform package put more money into people’s pockets.

The supermarket segment recorded the highest SSSG of 7.6 percent, followed by specialty stores (mostly consisting of fashion outlets) at 6.9 percent, convenience stores at 5.1 percent, hardware/do-it-yourself (DIY) at 5 percent, drugstores at 3.3 percent, and department stores at 2.3 percent.

Blended gross profit expanded by 15 percent to P29.7 billion while cash flow as measured by earnings before interest, taxes, depreciation and amortization rose by 7.6 percent to P9 billion.

Excluding franchised The Generics Pharmacy stores, RRHI last year had 1,910 stores—252 supermarkets, 52 department stores, 210 DIY stores, 499 convenience stores, 510 drugstores and 387 specialty stores.

RRHI ended last year with net cash of P27.8 billion. —DORIS DUMLAO-ABADILLA

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TAGS: high inflation, net profit, Robinsons Retail Holdings Inc. (RRHI)
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