MerryMart records 28.9% drop in net income
MERRYMART Consumer Corp. announced on Monday a 28.9% drop in its 2023 net income to P408.2 million from P574 million the previous year, mainly due to increased operating expenses.
“The decrease is mainly due to the lower gross profit and higher expenses during the year given the temporary scale up stage of the wholesale business with higher per transaction value but tighter margins and additional expenses in the distribution centers, logistics network and systems upgrade,” MerryMart said in a regulatory filing on Monday.
The company’s revenues rose by 17.9% to P6.3 billion from P5.35 billion in 2022, driven by higher revenue from additional stores, the growth of existing stores, and the wholesale business.
MerryMart saw a 23.1% increase in operating expenses to P1.14 billion due to new operational stores and increase in distribution centers, logistics and systems upgrade expenses.
Gross profit dropped by 19.2% to P818.1 million.
Total assets of the company as of end-December increased by 50.3% to P12.31 billion in value.
“The wholesale business is currently on scale-up stage. The wholesale e-commerce business has significantly grown with tighter margins but with higher transaction value. MerryMart continues to invest in parts of its business that is important in its preparation as it expects to significantly grow its market share with improvements in distribution centers, logistics and systems upgrade,” the company said.
MerryMart Chairman Edgar “Injap” J. Sia II said the company’s “strong foundation” allows it to face challenges and sustain growth.
“With a strong foundation in place, MerryMart will be better equipped to weather challenges and scale operations efficiently in the future. We are making strategic decisions that prioritizes long-term sustainability above all, laying the groundwork for the future success and growth of MerryMart to delight the customers today as well the next decades,” he said.
In July, the company targets to open its largest standalone full-sized supermarket at Ayala Land’s Cresendo Estate in Tarlac province. The supermarket sits on 4,032 square meters of land and features roof solar panels, LED lighting fixtures, as well as bicycle slots and electric car charging provisions.
The upcoming branch will carry the full line of grocery, pharmacy, personal care and other basic essential products.
On Monday, MerryMart shares fell by 1.2% or one centavo to 82 centavos per share. — Revin Mikhael D. Ochave