Cosco sets P3.6B capex, posts 79% income fall

RETAIL holding firm Cosco Capital, Inc. (Cosco) is allocating P3.6 billion for capital expenditures (capex) this year as it reported 79% lower earnings in the first quarter after accounting for last year’s non-recurring gain.

In a regulatory filing, the Lucio L. Co-led company said its attributable net income during the January-to-March period stood at P1.41 billion, down from P6.85 billion in the same period last year.

But its core net income, which excludes last year’s one-time gain from selling its equity interest in Liquigaz Philippines Corp., rose 13% to P2.32 billion.

Consolidated revenues grew 15% to P43.09 billion, largely attributed to the 17% increase in grocery retailing revenues to P40.95 billion.

Cosco said it saw some climb in sales in both Puregold stores and S&R warehouses due to the heightened consumer buying with the coronavirus outbreak. However, the growth was tempered by the temporary closure of S&R restaurant outlets in malls and central business districts.

The liquor distribution segment recorded revenues of P1.85 billion during the period, down 13% from a year ago. The imposition of a quarantine in mid-March also came with the declaration of a liquor ban, which affected its sales volume to fall 9%.

Revenues from the real estate segment likewise fell 3% to P526 million, attributed to the temporary closure of malls and commercial establishments, resulting in the waiving of rentals and other fees from tenants.

The specialty retail segment, which accounts for the operations of Office Warehouse, Inc., posted a 14% revenue drop to P536 million because of temporary store closures following the lockdown.

Of the company’s capex budget of P3.6 billion this year, some P3.4 billion will go to the Puregold Group, P150 million to the real estate group, and P50 million to Office Warehouse. Capex will be funded by internally generated cash, and if necessary, by short term bank credit.

Shares in Cosco at the stock exchange picked up six centavos or 1.1% to close at P5.50 each on Thursday. —