METRO RETAIL Stores Group, Inc. (MRSGI) reported a 19.7% drop in net income last year due to the implementation of a new accounting standard.
In a statement, the Cebu-based retailer said its net income after tax for 2019 stood at P776 million, primarily due to the P363.7-million impact of implementing the Philippine Financial Reporting Standard (PFRS) 16 accounting standard.
PFRS 16 took effect on Jan. 1, 2019, requiring companies to “recognize all leases on their balance sheet except for relatively small-value assets and leases with terms of 12 months or less,” a guide from accounting firm PwC Philippines said.
MRSGI said without the effects of implementing PFRS 16, the company’s net income would have grown 18% last year.
Total sales in 2019 rose 11.3% to P36.8 billion, resulting in an operating income growth of 21.5% to P1.06 billion.
“MRSGI’s push to increase its store network to serve emerging cities and municipalities in Visayas, Central Luzon and the Bicol region was vital to the homegrown retailer’s strong performance,” the company said.
