MANILA, Philippines — The 2023 earnings of Cosco Capital Inc. – the listed supermarket, liquor, and property holding firm of billionaire Lucio Co – was nearly flat as the high cost of the “aggressive” expansion of its grocery business, its largest income contributor, tempered overall income growth.
In a stock exchange filing on Friday, Cosco said its net income last year grew by only 1 percent to P12.4 billion from P12.3 billion in 2022, while revenues climbed by 8.8 percent to P214.5 billion.
Its retail businesses, Puregold Price Club Inc. and S&R Membership Shopping Club, accounted for 69 percent of total earnings, while liquor distribution through listed The Keepers Holdings Inc. contributed 24 percent. The commercial real estate segment accounted for 7 percent.
Puregold and S&R booked an 8-percent growth in sales to P199 billion on higher foot traffic buoyed by consumer revenge spending and postpandemic recovery.
“The company continues to see a buoyant trajectory in topline growth for the balance of the year,” Cosco said in its disclosure.
READ: Cosco’s 9-month profit hits P9.1B
However, the segment also saw its earnings drop by 7.4 percent to P8.6 billion due to a decline in margins caused by an aggressive store expansion and an increase in retirement benefit expenses, according to Cosco.
Liquor, real estate and specialty retail
The Keepers, meanwhile, saw its consolidated revenue rising by 17 percent to P16.3 billion, while net income jumped by 30 percent to P2.9 billion due to stronger sales of imported brandy, spirits, wines, and specialty beverages.
Cosco also noted that imported brandy Alfonso had already surpassed prepandemic sales levels.
Meantime, the commercial real estate segment posted a 7-percent increase in rental revenue to P1.95 billion on the rise in economic activities and the full resumption of rental rates based on contracts.
Net income of the segment likewise grew by 10.4 percent to P933 million.
Specialty retailing business Office Warehouse Inc. booked a 20-percent growth in revenue to P2.15 billion, while net income improved by 14 percent to P78 million.
READ: Lucio Co joins renewable energy race
Cosco announced in March that it would soon enter the renewable energy space via its acquisition of 60 percent of Catuiran Hydropower Corp. for P551.88 million.
Co will join tycoons Sabin Aboitiz of the Aboitiz Group and Manuel Pangilinan of Manila Electric Co. in hopes of increasing the share of renewables in the country’s energy mix.