RRHI profit down 32.4% as of June

Gokongwei-led retailer Robinsons Retail Holdings Inc. (RRHI) booked P1.77 billion in first semester net profit, down 32.4 percent from the same period last year as noncash interest expense on lease liability ballooned following a shift to new accounting standards.

RRHI reflected the year-to-date impact of adopting the new accounting standard on leases under Philippine Financial Reporting Standards (PFRS)16.

Due to PRSF16 adjustments, RRHI’s interest expenses skyrocketed to P1.2 billion in the first half from only P55 million the previous year. The shift to PFRS 16 thus reduced its net income attributable to parent company by P481 million or 21.3 percent versus pre-PFRS 16 reporting.

Excluding the impact of PFRS 16, operating income and cash flow as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) rose by 3.1 percent year-on-year to P3.1 billion and 11.3 percent to P4.6 billion, respectively.

RRHI recorded a 27.7-percent increase in consolidated net sales of P77.2 billion in the first semester, driven by the same store sales growth (SSSG) of 3.9 percent, additional sales coming from new stores opened in the last 12 months and the consolidation of Rustan Supercenters, which it acquired in November 2018.

The supermarket segment now accounts for 54 percent of RRHI’s entire business, from 46 percent in the same period last year before the acquisition of Rustans. Consolidated net sales for the second quarter alone reached P39.9 billion, up by 26.5 percent year-on-year.

SSSG in the first half of the year was driven by the drugstore segment which registered double-digit SSSG of 11.2 percent, followed by supermarket at 4.3 percent, do-it-yourself (DIY) shops at 3.6 percent, specialty stores at 3.6 percent, and convenience store at 2.3 percent.

Excluding the franchised stores of The Generics Pharmacy, RRHI ended the year with a total of 1,920 stores consisting of 255 supermarkets, 49 department stores, 211 DIY stores, 518 convenience stores, 510 drugstores and 377 specialty stores. The group’s gross floor area expanded by 18.5 percent year-on-year to 1.39 million square meters.  —DORIS DUMLAO-ABADILLA