Puregold Price Club’s net profit falls by 6.6% to P1.66B in 1st half of 2014

MANILA, Philippines — Local retailing giant Puregold Price Club Inc. posted a 6.6-percent decline in first-semester net profit to P1.66 billion due to some non-recurring items that boosted earnings in 2013.

INQUIRER FILE PHOTO

The decline was attributed to the absence of the interest income recognized in the comparative period that had come from the short-term investments. Specifically, these comprised of interest earnings from the P5 billion raised by Puregold from a corporate notes issuance but these notes were pre-terminated and paid in full in April 2013 due to changes in applicable taxation rules.

On a recurring basis, Puregold told the Philippine Stock Exchange on Thursday that its net income after tax would have increased by 0.9 percent year-on-year in the first semester.

For the six-month period, consolidated net sales grew by 16.8 percent year-on-year to P38.55 billion. This was attributed to the continuing expansion and sales turnover of 228 Puregold and S&R membership shopping stores operating as of the end of June.

For the full year, Puregold has maintained its guidance of 20 percent growth in consolidated net sales.

Puregold posted a gross profit margin of 16.5 percent in the first semester from 17.5 percent in the same period last year. “The sagging in the gross margin was due to the lower sales volume generated from non-food items, which became expensive to the mass market due to the effect of the sin tax law,” the company said.

This referred to the increase in excise taxes on “sin” products such as cigarettes and alcohol.

In terms of net profit margin, Puregold recorded a 4.3-percent net profit margin compared to the 5 percent net margin in the same period in 2013.

As of the end of June, Puregold opened 15 new Puregold stores. Its target for the full year is to open a total of 25 new stores. Another S&R store is likewise planned to be opened towards yearend.