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Gaisano-led retailer posts 87% profit drop as insurance claims dip

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Metro Retail Stores Group

EARNINGS of Metro Retail Stores Group, Inc. (MRSGI) plummeted 87% in the first quarter due to lower proceeds from insurance claims.

The Gaisano-led retailer reported a net income after tax of P7.98 million during the three-month period, down from P62.93 million in the same period last year.

It said operating income increased by P24.3 million, but non-core income fell by P97.4 million because of “the last tranche of insurance recoveries which tapered to P104.4 million vs. P190.5 million a year ago.”

MRSGI also started implementing a new accounting standard that resulted in a net impact after tax of P20 million.

The company’s lower bottomline came despite a 10% climb in revenues to P8.57 billion, which was lifted by its food retail business that benefited quarantine measures related to the coronavirus disease 2019 (COVID-19) pandemic. Food retail recorded net sales of P8.5 billion, up 9.9% from last year.

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Blended same store sales climbed 3% during the period, but the total general merchandise business fell 10.6% due to department store closures.

The implementation of an enhanced community quarantine in mid-March restricted mall operations to stores providing basic needs such as supermarkets and drug stores.

MRSGI’s operating expenses fell 4.6% due to the closure of most mall facilities, which offset the additional overhead costs it recorded from opening new malls during the period.

“As Luzon and Visayas start to ease its quarantine restrictions, MRSGI affirms its commitment to continue serving the interests of its customers, employees, shareholders and the general public and contributing to the economic recovery,” it said in a statement.

“Regular disinfection of all touch points and high traffic areas in the stores before, during, and after operating hours have been rolled out,” it added.

Shares in MRSGI at the stock exchange gained four centavos or 2.52% to close at P1.63 apiece on Tuesday. — Denise A. Valdez

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