Cosco Capital quadruples Q1 earnings

MANILA, Philippines - Cosco Capital Inc., the newly-structured investment holding firm of tycoon Lucio Co, quadrupled its earnings in the first quarter on the back of the strong performance of its retail businesses.

In a regulatory filing, Cosco Capital said its net income surged to P801 million from P193 million a year ago.

“The increase was generally attributable to expansion for all businesses; newly opened stores and acquisitions for retail business; and newly completed properties for lease from the real estate business,” Cosco Capital said.

The holding firm recorded a 51-percent growth in revenues to P17.1 billion in the first quarter from P11.4 billion a year ago.

Revenues surged 50 percent for the retail business, 116 percent for real estate, 33 percent for liquor, and 100 percent for oil storage, Cosco Capital said.

Of the earnings, the retail business accounted for 61 percent, followed by real estate at 21 percent, liquor distribution at 13 percent and oil storage at five percent.

“The growth in net income was basically attributable to the expansion in all businesses to capitalize from the consumption levels as well as the escalating income levels,” Cosco Capital said.

In particular, the retail business, primarily through Puregold Price Club Inc., more than doubled its profits to P962 million in the first quarter from P469 million last year while net sales jumped 49.8 percent to P16.09 billion.

“This was the result of the continuous expansion of the retail business including major acquisitions in the previous year and in the first quarter of the 2013,” Cosco Capital said.

In January, Puregold spent P329.99 million to beef up its portfolio by acquiring Mega Manila-based chains Eunilaine and Grocer E.

The retail segment also added nine stores, allowing the company to end the first quarter with 180 stores, including six S&R branches.

For its part, the real estate business recorded a 382-percent growth in net income to P167 million, driven by a 116-percent gain in revenues to P403 million.

“The increase was attributable to the newly-constructed buildings, which started operations by the last quarter of 2012 including those located in Cavite, Subic and Building 2 in Divisoria 999,” Cosco Capital said.

The liquor distribution business also enjoyed higher sales at P725 million, up 33 percent from a year ago.

Cosco Capital said sales volume increased given a new tax regime that allowed the company to import and sell more to current distributors.

Oil storage unit Pure Petroleum Corp., which just started operations in November, posted P50 million in revenues and P45 million in operating income.

However, mining revenues dropped 37 percent to P600,000 “due mainly to the decrease in the share in revenue received from SC-14 B1 (North Matinloc),” Cosco Capital said.

Cosco Capital is planning to conduct a $500-million sale of existing and new shares that will increase its public float and beef up liquidity.

Formerly Alcorn Gold Resources Corp., Cosco capital earlier announced it needs P12 billion (around $293 million) to take advantage of growth opportunities and pay existing debts.

The Co family injected into Cosco Capital its 51-percent stake in Puregold and a portfolio of liquor distribution companies, commercial real estate firms and an oil storage business.

With the transaction, the Co family now owns 93.4 percent of Cosco Capital, up from 67 percent as public investors’ shares were diluted to 6.6 percent from 33 percent.