FRUITAS PROFITS UP
Fruitas Holdings, Inc. (FHI) posted a consolidated net income of Php14.6 million for the first quarter of 2020, 41% higher than the same period in 2019. Further, store sales grew by 16 percent for the first two months of 2020.
“We experienced strong sales growth in the first quarter of 2020, although it was cut short by the quarantine. However, the cost containment measures we had earlier implemented, as well as our flexible cost structure, allowed us to cut costs to deliver higher net income in the first quarter of 2020 compared to 2019,” according to Lester Yu, FHI president and CEO.
Yu also said the second quarter has been more difficult for us, but we look forward to reopening more stores, so the combined strength of our traditional channels and new revenue streams from delivery and partnerships can provide even better returns for our shareholders.”
Earnings gains were achieved despite challenges brought about by the Taal Volcano eruption in January, which affected sales in surrounding areas, and emerging worries on COVID-19 starting in the second half of February 2020, which adversely affected customer traffic.
The quarantine imposed in the second half of March 2020, which forced the company to suspend operations of most of its stores, caused first quarter revenue to decline by 11.5% from Php423 million in 2019 to Php374 million in 2020.
Tactical price adjustments carried over from last year allowed the company to improve gross profit margin for the first quarter of 2020 to 60%, compared to 58% during the same period last year.
EBITDA for the first quarter of 2020 reached Php54 million compared to Php47 million for the first quarter in 2019. The company was able to reduce operating expenses, excluding depreciation and amortization, by 15% from Php202 million to Php172 million to compensate for the lower revenue.
Deleveraging of the company’s balance sheet continued into the first quarter of 2020, with ‘notes payable’ down to Php176 million from as high as Php409 million as of end-June 2019. Reduced interest expense also contributed to better profitability.