Puregold profit up 46.5% to P2.64B

MANILA, Philippines - Grocery chain Puregold Price Club Inc. said its earnings surged by nearly half in the nine months to September this year as its network expected through new stores and acquisitions.

In a disclosure, to the stock exchange, the Lucio Co-owned retailer reported that its net income spiked 46.5 percent to P2.64 billion in the nine-month period, from P1.8 billion last year.

“This was a result of the continuous strategic expansion of the group including major acquisitions in the previous year and in the first half of 2013,” Puregold said.

Net sales hit P51.49 billion, up nearly a third from P39.13 billion in the same period last year, while cost of sales picked up at a slower pace of 29.5 percent to P42.57 billion from P32.87 billion.

“New stores put up in 2012 were fully operating in 2013, increasing consolidated net sales for the nine-month period,” Puregold said.

Operating expenses climbed 40.7 percent to P6.85 billion from P4.87 billion a year ago due to manpower costs in new stores “as well as rent expenses relative to new lease contracts, utilities expense, depreciation expense and taxes, all related to the establishment and opening of new stores,” Puregold said.

The grocery chain is putting up at least 25 new stores every year in the next five years, focusing on unserved cities and municipalities nationwide.

Puregold has counted close to 500 cities and first-class municipalities nationwide that it can tap for new stores.

Last month, Puregold hit the 200-store mark. In the first semester alone, the company opened 21 new Puregold and S&R stores. It also acquired Company E Corp.’s 15 branches.

This year, Puregold is branching out in Mindanao with the opening of its flagship store in Cagayan de Oro and an S&R Membership Club in Davao.

For its part, parent firm Cosco Capital Inc. said its nine-month net income more than doubled to P2.22 billion from the pro-forma P948 million last year. Revenues jumped 35 percent to P54.4 billion from P40.25 billion year-on-year, primarily driven by Puregold.

Aside from Puregold, Co’s investment holding firm is also into liquor importation (Premier Wine & Spirits Inc.), commercial real estate, oil storage and oil exploration activities.

Cosco Capital claims to be the country’s leading importer of liquor with exclusive distribution rights for some of the world’s top brands like Cuervo, Jim Beam, Fundador, Absolut Vodka, Johnny Walker, Chivas Regal and Alfonso.