Cosco Capital posts record income in 2014

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LUCIO CO-LED Cosco Capital Inc. reported record earnings last year as strong sales at its retail arm Puregold Price Club Inc. boosted the company’s consolidated net income by 16 percent from a year earlier.

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Cosco reported consolidated net income of P6.24 billion last year, up from P5.36 billion in 2013.  Meanwhile, consolidated revenues went up 27 percent to P98.75 billion from P77.79 billion in the previous year.

“I believe that 2015 will be another record year of profits for Cosco as all our operating business units have shown double-digit profit growth in 2014, and we are excited for more expansions and acquisitions across all businesses to cater to the growing demands of consumers,” said Cosco president Leonardo Dayao.

Cosco said retail unit Puregold’s contribution to net income was 73 percent while real estate leasing accounted for 15 percent, liquor distribution added 10 percent, and specialty retail stores that include newly acquired firms last year contributed another 2 percent.

The retail segment, consisting of Puregold and S&R Membership Shopping outlets, accounted for the lion’s share of revenues at 85.8 percent. Other revenue contributors were newly acquired units LPG firm Liquigaz and DIY shops Office Warehouse (8.8 percent), liquor distribution (3.8 percent), and real estate leasing businesses (1.6 percent).

For 2014, Puregold reported a net income of P4.52 billion, up 18 percent from P3.83 billion in 2013. At the end of 2014, Puregold had a total of 248 stores —233 Puregold stores and nine S&R Membership stores—with a net selling area of about 405,000 square meters.

Cosco  closed the year with more than P15 billion in cash and a debt to equity ratio of 52 percent.

Last month, the Cosco Group bought 14 properties, mostly in Nueva Ecija—nine supermarkets for Puregold and five commercial lots for Cosco—to boost recurring income and sales.

Puregold is planning to spend P18.5 billion from 2015 to 2019 to increase its store network by 50 percent.  Cosco, meanwhile, plans to build six community malls over the next three years at a cost of P2.4 billion.

Cosco is still looking to acquire businesses in the hardware, pharmacy and home improvement segments after having recently bought school and office supplies retailer Office Warehouse Inc. and liquefied petroleum gas (LPG) distributor Liquigaz Philippines Inc.

The Lucio Co-led group is also set to roll out 500 Lawson convenience stores in the next five years, with its first store opening held last month.

Cosco expects to close 2015 with 50 stores. The first 200 Lawson stores will be company-owned while the rest will be franchised. Each Lawson outlet is estimated to cost P5 million to P6 million.

Incorporated in 1998, Puregold primarily operates hypermarkets and retail stores. Its portfolio includes hypermarket format Puregold Price Club, supermarket Puregold Junior, discounters format Puregold Extra, and high-end membership shopping outlet S&R.

Incorporated in 1988, Cosco is the holding firm of business magnate Lucio Co which has interests in retail (Puregold Price Club Inc.), real estate (Ellimac Prime Holdings Inc. etc), liquor distribution (Premier Wine and Spirits Inc.), liquefied petroleum gas, and mining.

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