SSI net income down 19% on joint venture losses

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SSI Group Inc., the country’s largest specialty store retailer, said earnings last year fell by almost a fifth as a result of higher expenses and losses related to FamilyMart and WellWorth joint ventures.

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In a disclosure to the Philippine Stock Exchange on Thursday, the upscale retailer said net income fell by nearly 19 percent to P810.7 million last year from P998 million in 2014.

SSI (Store Specialist Inc.) noted its share in the net losses of the FamilyMart and
WellWorth joint ventures rose to P228.3 million from P144.9 million in the same comparable period.

It incurred other charges of P474.7 million from P384.8 million.

The increase in other charges was mainly associated with an increase in interest expense at P315.3 million from P281.6 million in, as the group continued to fund its store expansion program.

SSI generated revenues of P17.4 billion, up 15 percent year-on-year.

“Revenue growth continues to be driven by new stores added to the group’s network and by its diversified brand portfolio,” it said.

As of end-2015, the group registered 792 specialty stores covering more than 147,000 square meters, a 10 percent increase in its retail footprint.

Its portfolio consisted of 116 brands last year.

Earnings before interest, taxes, depreciation and amortization were at P3.3 billion, up 12 percent year-on-year.

“SSI faced a more competitive environment during the 2nd half of 2015. However, we remain focused on growing our market share and on optimizing the efficiency of our store network. SSI continues to be in a strong competitive position given the breadth and relevance of our brand portfolio and our store network.” Anthony Huang, the company’s president, said.

As of end-2015, SSI was operating 112 FamilyMart stores through a joint venture with Ayala Land and FamilyMart Japan.

Earlier this year, the company sold its interest in WellWorth department stores to Gaisano group’s Metro Retail Stores Group Inc. WellWorth had two branches in Quezon City.

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