Puregold nets P1B in 1st half of 2012

INQUIRER FILE PHOTO

MANILA, Philippines—Grocery chain operator Puregold Price Club grew its first-semester net profit by 32 percent year-on-year to P1.03 billion as new acquisitions and store openings boosted sales.

About 55 percent of the six-month profit was generated during the second quarter at P565 million, which was 39 percent higher than a year earlier.

For the six-month period ending June, Puregold jacked up its net sales by 34.4 percent to P23.27 billion.

The opening of new stores in 2011 contributed 68.2 percent of the total increase in net sales.

As of end-June, the company had a total of 109 stores in operation, including 66 hypermarkets, 32 supermarkets and 11 discounters, of which nine stores were opened in the first half of 2012. On top of these, the group acquired last June the six-store S&R Membership Chain and 19 Parco supermarkets, contributing 15.1 percent of the total increase in the group’s net sales.

Total cost of sales for the six-month amounted to P19.59 billion, an increase of 33.5 percent year-on-year largely due to the opening of new stores and acquisition of subsidiaries but partially offset by increase in conditional discounts from the group’s suppliers.

Other operating income increased by P178 million or 37.2 percent, largely due to the opening of new stores and increase in commissions due from renting of product locations in store aisles to suppliers and renting of booths to third party retailers, as well as increase in display allowances from the stores. Acquisition of subsidiaries contributes 19.3 percent of the increase to the group’s total operating income.

Selling expenses increased by P815 million or 50.7 percent, due to the increase in the cost of manpower to staff the company’s new stores, increase in rent expenses due to additional lease contracts, utilities expense and depreciation expense largely related to opening of new stores.

General and administrative expenses increased by P67 million or 37.2 percent. This was due to increases in taxes, maintenance costs, insurance and transportation expenses as a result of the company’s expansion and the renovation of older stores.