The Market Monitor Minding the Nation's Business
Union Bank of the Philippines (UBP) will fund P1 billion of the Gaisano group’s Metro Retail Stores Group Inc.’s (MRSGI) expansion plan in Metro Manila.
MRSGI said its board passed a resolution granting the corporation the authority to apply for and avail itself of the credit accommodation and facility in the principal amount of P1.05 billion offered by the UBP. Metro Retail reported to the stock exchange that its board also approved in the same resolution the signing of the loan deal with Union Bank. on behalf of the corporation for the availment of the credit accommodation and facility.
Listed on the Philippine Stock Exchange (PSE) last November 24, MRSGI reported an increase in net income of P344 million, up by 23.5 percent for the first nine months of 2015 mainly due to net sales growth of 15 percent and reduced operating expenses.
The net sales improvement was supported by strong same stores sales growth of 9.5 percent led by hypermarkets segment. The company also attributed strong sales performance to the contribution of new stores where MRSGI added two new supermarkets and four hypermarkets in the fourth quarter. Income before income tax grew 24 percent to P492 million in the first nine months from P397 million a year ago.
The financial outcome was also a significant improvement compared to the first half in which it recorded an increase of 21.2 percent in pre-tax earnings.
“Our third quarter results reflect our customers and partners’ unwavering support for MRSGI,” Frank Gaisano, MRSGI chairman and chief executive officer, said. Gaisano also underscored Metro Retail’s confidence to continue its expansion plan and widen customer base as the market continues to believe in the MRSGI retail experience.
“We are particularly encouraged by the performance of our stores in the Visayas region, “ he said. Metro Retail has 46 stores nationwide, composed of 24 supermarkets, 12 hypermarkets and 10 department stores. MRSGI is a recognized market leader in the Visayas.
MRSGI’s bank debt level remained very low at P950 million even as the proceeds from the public listing are expected to add around P3.4 billion by year-end to the company’s net worth, which stood at P2.7 billion as of September 30, 2015.
MRSGI’s initial public offer was the largest new equity issuance at P3.6 billion for the year 2015, Metro Retail said.
“While proceeds from the IPO are intended for ramping up the company’s store expansion and the enhancement of its distribution and logistics facilities, the move to join the arena of publicly-listed retailers also signals MRSGI’s capability to compete with other industry players in serving the value-conscious market,” Gaisano said. RIZA LOZADA