Robinsons Retail profit falls amid bank’s merger with BPI
MANILA -Gokongwei-led Robinsons Retail Holdings Inc. saw profits fall during the nine-month to September period this year mainly due to the strategic reorganization of its banking investments, including a multibillion-peso merger with Bank of the Philippine Islands.
This weighed on earnings as Robinsons Retail booked a net income of P2.58 billion, down over 41 percent. Net sales grew 8.7 percent to P138.2 billion.
The company said its main business operations remained resilient, given strong sales across its supermarkets, drugstores and department stores. Core profits during the nine-month period rose 4 percent to P3.8 billion, the filing showed.
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It said the drop in reported net income was partly due to changes to its banking investments. Robinsons Retail was a major shareholder of Robinsons Bank, which is being sold to BPI through a share-swap deal. It also took on additional debts to acquire nearly P20 billion worth of BPI shares early this year.
Interest expenses
Robinsons Retail said the profit decline was the result of losses from minority startup investments, the absence of earnings from Robinsons Bank due to the ongoing merger, and interest expenses from the acquisition of BPI shares.
Article continues after this advertisementThe company also cited the “absence of cash dividends from BPI in the third quarter of 2023” in its filing.
Article continues after this advertisement“BPI has historically paid dividends in the second and fourth quarters of each year. The expected cash dividends from BPI in the fourth quarter should fully cover for the acquisition related financing interest expense for the purchase of the BPI shares,” Robinsons Retail said.
Robina Gokongwei-Pe, president and CEO of Robinsons Retail, said the underlying business remained robust despite the current economic headwinds arising from elevated inflation and interest rates.
“These headwinds are temporary, in our view, and we thus remain positive on the long-term potential of the domestic retail industry given the Philippines’ attractive demographics,” she said.
