Metro Retail spends P93.1M for expansion, new warehouse

CEBU, Philippines – Cebu-based Metro Retail Stores had spent around P93.1 million so far for its store network expansion and new warehouse in Cebu.

In a stock exchange filing on Friday, the Gaisano-led multi-format retailer said that it had allocated P66.6 million capital expenditure for store network expansion, based on the firm's IPO (initial public offering) proceeds disbursement as of fourth quarter 2016.

The retailer also spent P26.5 million for its new warehouse in Cebu.

The company had inaugurated in April last year its additional leased warehouse located in Tingub, Cebu, as part of its strategic move to continuously modernize its logistics and supply chain processes.

As of last quarter, Metro's IPO proceeds balance amounted to P2.02 billion.

The Cebu retail giant raised P3.6 billion in its maiden share sale in November 2015.

Last May 2016, the company announced that it was investing as much as P15 billion to double its footprint in the next five years.

Chief Financial Officer Joselito Orense had said the retailer may tap the debt market on the third year of its expansion program through 2020 once it fully utilizes its IPO proceeds.

In the first nine months of 2016, the company’s profit fell 20% to P274.6 million from P344.3 million earned during the same period in 2015.

“Overall, the decrease in net income is due to operating losses sustained from the opening of new stores,” MRSGI had said in a regulatory filing.

Net sales in the third quarter rose 2 percent to P7.82 billion from P7.63 billion during the same period in 2015.

For the nine-month period, net sales rose 6 percent to P23.73 billion, as it opened four new stores during the last four quarters, while same-store sales grew by 2.9 percent.

However, increase in salaries and wages, rent expenses, overhead expenses and depreciation expenses offset the company’s positive sales growth.

MRSGI said net income for all stores slipped by P70 million from asset disposals, attributed to its acquisition of Wellworth Department Stores.

The Wellworth department stores were owned by SIAL Specialty Retailers Inc., a joint venture between Ayala Land, Inc., and the SSI Group.  — (FREEMAN)