Robinsons Retail 2019 profit down 25%

Gokongwei group-led retailer Robinsons Retail Holdings Inc. (RRHI) saw a 25-percent drop in net profit to P3.83 billion last year as higher expenses from the conso­lidation of grocery chain Rustan Supercenters offset margin improvement while new accounting rules jacked up noncash interest expense on lease liability.

RRHI reflected the year-to-date impact of adopting the new accounting standard on leases under Philippine Financial Reporting Standards (PFRS) 16, under which a right-of-use asset is recognized and amortized over the lease term while interest expense is incurred on the lease liability.

While PFRS 16 adjustments are noncash and have no effect on cash flow, they gnawed on RRHI’s bottom line amounting to P319 million in the fourth quarter and P1 billion for full-year 2019.

For the fourth quarter alone, RRHI’s net profit fell by 24.7 percent year-on-year to P960 million, even as net sales rose by 14.4 percent to P46.76 billion.

Excluding nonrecurring items,­ RRHI’s core net income post-PFRS 16 was at P4 billion in 2019, down by 21 percent from the previous year. Core profit for the fourth quarter fell by 17 percent year-on-year to P1.23 billion.

For the full year, RRHI’s consolidated net sales increased by 22.8 percent to P162.9 billion, driven by the same store sales growth (SSSG) of 3.4 percent, additional sales from the new stores opened in the last 12 months and the full year consolidation of Rustan Supercenters.

Blended SSSG for the full year stood at 3.4 percent. The performance for the quarter was primarily driven by the drugstore network, which posted SSSG at 7.4 percent, convenience store at 5 percent, department store at 4.7 percent and supermarket at 4 percent.