Robinsons Retail Holdings Inc.’s net income plunged 32.4% to P1.77 billion in the first half due to soaring costs.
Interest expense soared to P1.2 billion in January to June from only P55 million the previous year. The P1 billion increase in interest expense was due to non-cash interest expense on the lease liability as the company adopted the new accounting standard on leases (PFRS 16) effective Jan.1.
A right-of-use asset is recognized and amortized over the lease term while interest expense is incurred on the lease liability.
Net sales, meanwhile, jumped 27.7% to P77.21 billion, driven by the same-store sales growth (SSSG) of 3.9% , additional sales coming from new stores opened in the last 12 months and the consolidation of Rustan’s Supercenters.
SSSG was driven by the drugstore segment, which grew 11.2% followed by supermarket 4.3%, DIY 3.6%, specialty stores 3.6% and convenience stores 2.3%.
The supermarket segment now accounts for 54% of RRHI’s entire business, from 46% in the same period last year.
Excluding the franchised stores of The Generics Pharmacy, RRHI closed the first half with a total of 1,920 stores comprising of 255 supermarkets, 49 department stores, 211 do- it-yourself stores, 518 convenience stores, 510 drugstores and 377 specialty stores. The group’s gross floor area expanded by 18.5% to 1.39 million square meters.