Leading local multi-brand kiosk operator Fruitas Holdings Inc. (FHI) grew its first quarter net profit by 41 percent year-on-year to P14.6 million on the back of higher margins from price increases and cost-cutting measures.
“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,” Fruitas president and chief executive officer Lester Yu disclosed to the Philippine Stock Exchange on Tuesday.
However, Yu noted that the second quarter had been more difficult for Fruitas. “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,” he said.
Fruitas’ store sales grew by 16 percent for the first two months of 2020.
The quarantine imposed on Metro Manila and other key regions in the second half of March 2020, however, forced the company to suspend operations of most of its stores, causing first quarter revenues to decline by 11.5 percent year-on-year to P374 million.
Price adjustments carried over from 2019 allowed Fruitas to improve gross profit margin for the first quarter to 60 percent, compared to 58 percent during the same period last year.
Cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) for first quarter reached P54 million compared to P47 million in the same period last year.
The company was able to reduce operating expenses, excluding depreciation and amortization, by 15 percent year-on-year to P172 million to compensate for the lower revenue.
Fruitas also trimmed its liabilities in the first quarter, reducing interest expense that in turn contributed to higher profits in the first three months.
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