Cosco Q1 consolidated net up 17% at P1.49B

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COSCO Capital Inc, the listed holding firm of retail magnate Lucio Co, said its consolidated net income in the first quarter grew 17 percent from a year earlier on the back of robust growth in its retail businesses.

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Consolidated net income rose to P1.49 billion from P1.28 billion in the first quarter of 2014, while net income attributable to equity holders jumped 18 percent to P965 million from P817 million previously, the company said in a statement.

Net income after taking out minority interest from the retail business unit contributed 55 percent of the profits followed by real estate leasing (24 percent), liquor distribution (13 percent) and specialty retail (13 percent).

Net incomes for the retail business, real estate leasing and liquor distribution grew the most, posting growth rates of 12 percent, 17 percent and 9 percent, respectively.

Consolidated revenue in the first quarter rose 33 percent to P25.63 billion from P19.23 billion a year ago.

“Our operating business units will sustain its growth in 2015 and we will continue to embark on more expansions and acquisitions across all businesses to cater to the growing demands of consumers,” Cosco president Leonardo Dayao said.

Bulk of the total revenues came from its retail businesses via Puregold and S&R Membership Shopping stores (81 percent), followed by specialty retail revenues from office supplies retailer Office Warehouse Inc. and liquefied petroleum gas (LPG) distributor Liquigaz Philippines Inc. (14 percent), while the rest are contributed by its liquor distribution and real estate businesses.

The company has a strong financial balance sheet with more than P9.5 billion in cash and a debt-to-equity ratio of only 42 percent.

Its listed retail subsidiary Puregold Price Club Inc. also grew its first quarter net income by 11.7 percent to P1.05 billion from a year ago due to strong consumer demand
As of last year, Puregold was already operating 243 existing stores comprising 233 Puregold stores, nine S&R Membership stores and six S&R QSR stores.

In February, the Cosco Group bought 14 properties mostly in Nueva Ecija — nine supermarkets for Puregold and five commercial lots for Cosco — to boost its recurring incomes and sales.

The purchase was in line with both companies’ expansion programs—Puregold’s P18.5 billion planned spending from 2015 to 2019 to increase store network by 50 percent over the next five years, as well as Cosco’s six community malls programmed in the next three years, amounting to P2.4 billion.

Apart from the Cosco community mall, Cosco is also looking at acquiring businesses in hardware, pharmacy and home improvement segments.

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 last month, and expects to close 2015 with 50 stores.
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, high end membership shopping S&R.

Also incorporated in 1988, Cosco is the holding firm of business magnate Lucio Co and 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.
KRISTYN NIKA M. LAZO

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