Robinsons Retail core profit up 4 percent in 9 months

MANILA, Philippines — Gokongwei-owned Robinsons Retail Holdings Inc. (RRHI) reported that its core earnings went up by four percent to P3.8 billion in the nine months to September from a year ago.

Net income attributable to equity holders of the parent company fell by 41.4 percent  to P2.6 billion during the nine-month period,  weighed by equitized losses from minority startup investments which continue to ramp up.

The decline was also due to the de-recognition of Robinsons Bank’s net income under equitized earnings following the ongoing merger with the Bank of the Philippine Islands (BPI), interest expense from the acquisition financing of the BPI shares that were purchased earlier this year, and the absence of cash dividends from BPI in the third quarter of 2023.

BPI has historically paid dividends in the second and fourth quarters of each year,” RRHI said in a disclosure to the Philippine Stock Exchange.

The expected cash dividends from BPI in the fourth quarter should fully cover for the acquisition-related financing interest expense for the purchase of the BPI shares.

Robina Gokongwei-Pe, president and CEO of RRHI, said “our defensible business model has enabled us to continue growing and remain relevant among Filipino consumers. This is notwithstanding near-term macroeconomic challenges, particularly the impact of inflation on consumer sentiment.”

She said the headwinds are temporary, “and we thus remain positive on the long-term potential of the domestic retail industry given the Philippines’ attractive demographics. “

Moving forward, Gokongwei-Pe said RRHI  would continue to invest with a long-term view and in a sustainable manner.

Net sales during the nine-month period reached P138.2 billion, up 8.7 percent year-on-year despite the challenging environment brought about by the lingering impact of inflation and a higher base effect which benefitted from economic reopening and election-related spending last year.

 The growth in net sales was supported by blended same store sales growth (SSSG) of five percent and store expansion initiatives. The core staples businesses – supermarkets and drugstores in particular – were the main revenue growth drivers in the nine months of 2023, the company said.

“Core net earnings exclude foreign exchange gains/losses, interest income from bonds, equity in earnings from associates, interest expense related to the BPI acquisition financing, BPI cash dividends, and others,” RRHI said in a regulatory filing.

The company’s consolidated gross profit continued to grow faster than revenues, increasing by 9.4 percent year-on-year to P32.9 billion during the nine-month period.