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Fruitas earnings jump 41% in Q1

By James A. Loyola

Fruitas Holdings, Inc. (FHI) posted a 41 percent jump in consolidated net income to P14.6 million in the first quarter of 2020 as store sales grew by 16 percent for the first two months of 2020.

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.

“We experienced strong sales growth in the first quarter of 2020, although it was cut short by the quarantine,” said FHI President and Chief Executive Officer Lester Yu in a disclosure to the Philippine Stock Exchange.

However, he said “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.”

“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,” Yu added.

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 percent from P423 million in 2019 to P374 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 percent, compared to 58 percent during the same period last year.

The company was able to reduce operating expenses, excluding depreciation and amortization, by 15 percent from P202 million to P172 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 P176 million from as high as P409 million as of end-June 2019. Reduced interest expense also contributed to better profitability.


Source: Manila Bulletin (https://business.mb.com.ph/2020/06/30/fruitas-earnings-jump-41-in-q1/)

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