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Gaisano firm reports only slight decline in 2018 profit despite fire

This photo of the fire-hit Metro Ayala building was taken on January 31, 2019. (Ventures Cebu)

Cebu-based Metro Retail Stores Group, Inc. (MRSGI) said its performance remained strong in 2018 despite a fire that gutted its building at the Ayala Center Cebu.

In a regulatory filing on Thursday, April 4, the Gaisano-led retailer reported a net profit of P965.4 million, about 1.2% lower than the P977 million recorded in 2017.

“Twelve-month profit declined by a minimal 1.2 percent versus prior year highlighting a strong performance despite a fire that damaged a department store and supermarket in Ayala Center Cebu in January 2018,” MRSGI stated.

“The rest of the stores remained positive and continued to exceed prior year’s performance on the back of steady same-store sales growth of 5.1 percent and 110 basis points improvement in same-store gross profit margins versus prior year,” it added.

The Metro Ayala store, one of two anchor stores of the Ayala Center Cebu, is still being rebuilt although the Metro Supermarket fully resumed operations on December 30, 2018.

Reconstruction is targeted to be completed in the second half of 2019, the company said.

Read: Metro Retail reopens supermarket in fire-hit building in Ayala Cebu

The fire that gutted the building erupted on January 5, 2018 and was declared under control about 50 hours later. The eight-level Metro Ayala store, which consisted of a department store and supermarket, was one of the company’s biggest outlets in Cebu.

In its disclosure to the Philippine Stock Exchange (PSE) on Thursday, MRSGI said its total sales across all store formats decreased by 5.6% to P33.05 billion for the year, but gross profit margins posted another 60 basis points increase versus prior year.

This brings the growth in gross profit margins to 200 basis points over the last 2 years, arising from improvements in inventory and margin productivity, price competitiveness and merchandise assortment.

“Our healthy bottom line figures demonstrate the efficacy of our business strategies that have aided us in being resilient over internal and external tremors,” said Frank S. Gaisano, MRSGI chairman and CEO.

“Despite the adversities we faced, our results reflect our ongoing success in delivering broad and compelling assortment of goods and merchandise to today’s value-driven shoppers,” he added.

MRSGI president and chief operating officer Manuel C. Alberto said the company will continue to leverage on the country’s robust consumer spending and general economic optimism to continue with its expansion trajectory in Luzon and the Visayas.

“More than three and a half decades of providing quality merchandise and great value to our shoppers have ensured the solid position of Metro Retail Stores in the industry. We will continue adopting more strategic growth plans to ensure improved profitability as well as customer satisfaction,” Alberto said.

The company recently opened outlets, both department store and supermarket, at Ayala Malls Feliz in Pasig City, and at Ayala Capitol in Bacolod City.

MRSGI is also set to develop a government property in Catbalogan City in Samar into a mixed-use complex.

Read: Gaisano firm partners with Samar province for mixed-use project

MRSGI now operates 54 stores in Metro Manila, Central Luzon, and South Luzon, as well as in Central, Western, and Eastern Visayas. It has three store formats - department store, supermarket, and hypermarket.

MRSGI shares closed at P3.25 apiece on April 3, 2019. (Ventures Cebu)

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