Puregold more than doubles Q1 income

MANILA, Philippines - Grocery chain Puregold Price Club Inc. more than doubled its earnings in the first quarter as its sales soared with the addition of new stores..

In a report, the country’s second largest supermarket operator said it posted a 105.3-percent surge in consolidated net income to P962 million in the first three months of the year from P469 million a year ago.

The growth was supported by P16.09 billion in consolidated net sales, up by almost half from P10.74 billion last year.

“The 49.8-percent growth in consolidated net sales was principally due to the 18.2-percent growth in sales turnover of the 159 Puregold and Parco stores operating as of the first quarter,” Puregold said.

In the first quarter, Puregold opened nine new stores out of the initial target of 25 new branches for the entire 2013. Of the new stores, five were hypermarkets and four were supermarkets located in Southern Luzon, Northern Luzon and Metro Manila.

Bulk of sales came from Puregold, followed by the 16.4 percent and one percent contribution of S&R warehouse clubs and Company E stores, respectively.

Newly-acquired grocery chains were also renovated in the first quarter. Specifically, 10 former Parco stores and two Company E branches were already re-branded into Puregold hypermarkets, supermarkets and extra.

Puregold said its gross profit climbed 62.8 percent to P2.83 billion as gross profit margin improved to 17.6 percent from 16.2 percent in the same period last year.

The operating margin of the Lucio Co-led grocer also rose to 7.4 percent from 5.9 percent.

Last week, Puregold prepaid P5 billion worth of corporate notes, taking advantage of its existing bank credit lines at favorable interest rates.

In March, the company said it is a step closer to consolidating its grocery businesses Puregold Price Club Inc., Puregold Junior Supermarket Inc. S-CV Corp. and Gant Group of Companies Inc.

Puregold targets to grow its consolidated net sales by 30 percent to roughly P75 billion this year from P57.5 billion in 2012.

It intends to spend P3 billion this year to support its growth through new stores and continuous acquisition.

This year, Puregold is branching out in Mindanao with the opening of a store in Cagayan de Oro and an S&R Membership Club in Davao as part of plans to hit its 200-outlet target ahead by 2015.

Meanwhile, Cosco Capital Inc., the holding firm for all of Lucio Co’s businesses, said its profits nearly doubled last year, primarily driven by Puregold.

In a separate disclosure, Cosco Capital (formerly Alcorn Gold Resources Corp.) said its profits jumped 85 percent to P2.85 billion in 2012 from P1.53 billion a year ago.

Revenues, which were derived from net sales, services and production lifting, spiked to P60.67 billion from P41.44 billion in 2011.

Last week, the Securities and Exchange Commission approved the capital hike of Cosco Capital to P10 billion from P3 billion, paving the way for the creation of a P70-billion holding firm for all businesses of Co.

Cosco Capital subscribed to shares of Puregold, Ellimac, Go Fay, SVF Corp., Nation Realty, 118 Holdings, Patagonia Holdings, Fertuna Holdings, Premier Wine & Spirits, Montosco Inc., Metirus Prime and Pure Petroleum.