Cosco Capital Inc., the listed retail holding company of businessman Lucio Co, said it will spend P3.6 billion in 2020 primarily to fund the expansion of grocery chain Puregold.
Cosco said in an analysts’ briefing it allocated P3.4 billion for the construction of new stores under Puregold Price Club Inc.
Another P150 million was budgeted for the expansion of its real estate group while P50 million would be spent for its office warehouse business.
Funding for this year’s capital spending will come from internally-generated cash and short-term untapped bank credit lines.
Cosco said net income declined by 72 percent in the first quarter to P2.32 billion from P8.2 billion in the same period last year, mainly because of the one-time gain from the sale of Liquigaz last year.
It said that minus the one -time gain, first-quarter core net income rose 12 percent to P2.32 billion from P2.05 billion in 2019.
First-quarter consolidated revenues went up by 15.1 percent to P43.1 billion from P37.4 billion in the same period last year.
The group’s recovery grocery retailing businesses accounted for 95 percent of total revenues while liquor distribution, real estate and specialty retailing accounted for the remaining five percent.
Gross profit also went up by 10.6 percent to P7.7 billion.
Puregold reported a 16.8-percent increase in net income to P1.76 billion in the first quarter, boosted by the opening of six new stores, two S&R outlets and one quick service restaurant. Puregold group had 443 stores as of end-March.
The group’s liquor distribution business also posted a 1.3-percent increase in net income to P233 million even as revenues declined by 13 percent to P1.85 billion.