Cebu-based retailer Metro Retail Stores Group, Inc. (MRSGI) posted a net loss of P421.87 million in the first nine months of 2020, a reversal of the P398.19 million net income recorded in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said the net loss is driven by the 12.1 percent decline in revenue to P22.22 billion from the P25.28 billion in the same period last year.
This is as MRSGI’s general merchandise business dipped by 47.1 percent against the same period last year, reeling from the impact of pandemic related disruptions on consumer spending and customer traffic.
In addition, the company booked one-time cost provisions for store network and manpower rationalization programs, as roadmaps to better profitability.
Blended same store sales likewise contracted by 16.6 percent over the same period last year due to the decline in sales of the general merchandise business.
To respond to the drastic market shifts and to position the company for the “next normal,” MRSGI President Manuel Alberto noted that the retailer will not only focus on stabilizing the business but, more importantly, on making the right investments that will allow the company to be more competitive in the future.
“Given the changes in the retail landscape, we will head towards transforming MRSGI into an organization that is resilient, relevant, and responsive to the changing consumer dynamics,” Alberto said.
Over the next 12 months, transformation efforts will include increasing market reach in both digital and physical channels, optimizing costs by streamlining operations, rationalizing store network, and undertaking a workforce rationalization and rightsizing program.
These moves are intended to improve profitability and merchandise reach.
In this regard, the company recognized provisions pertaining to estimated non-recurring expenses in connection with its streamlining of operations and rationalization of stores and workforce amounting to P396.4 million.
| As a result, net income after tax decreased by 206.0 percent over the same period last year. |