Costlier operations drag MRSGI earnings

Depreciation and higher charges pulled down the first-semester earnings of Gaisano-led Metro Retail Stores Group Inc. (MRSGI) despite posting a modest growth in sales.

The grocery retail chain on Thursday said its net income in the January to June period had slumped by 26.6 percent to P100.4 million.

Sales, meanwhile, inched up by 6 percent to P18 billion, driven by gains from its existing stores and incremental sales from newly opened branches.

According to MRSGI, its food retail segment posted a 7.9-percent sales growth while the general merchandise business had flat sales.

Rental income expanded by 21.3 percent to P189.9 million as new tenants came in, along with higher rates.

In the second quarter alone, sales went up by 7 percent to P9.3 billion.

“With the improved momentum from the second quarter and going into the second half of 2024, the company continues to hold an optimistic outlook for the rest of the year on the back of improvement in sales growth, cost management and the projected opening of new stores planned in the third and fourth quarters,” MRSGI president and chief operating officer Manuel Alberto said.

Operating expenses, however, also contributed to the decline in earnings as it registered a slight 2.2-percent increase to P3.65 billion due to higher rent and personnel costs as it opened new stores, MRSGI financial statement showed.

MRSGI currently has 64 branches in Luzon and the Visayas under the Metro Supermarket, Metro Department Store, Super Metro Hypermarket and Metro Value Mart store formats.

The company aims to reach 160 stores by 2027.

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MRSGl in April broke ground for four new stores in the provinces of Cebu and Leyte as it worked to increase commercial accessibility in these areas while expanding its store network.

It is set to build a Metro Supermarket in Barangay Tayud, Liloan, Cebu, as well as two Metro Value Mart stores in other barangays.

Another supermarket will be constructed in Isabel, Leyte.

MRSGI has also opened a 3-hectare Metro Distribution Center in Laguna province capable of handling up to 25,000 cases daily for both inbound and outbound processes.

This translates to a maximum throughput of 1.5 million cases a month, which MRSGI said could support its Luzon and Visayas networks.