Higher provision for retirement benefits dents CP All’s Q2 profit

The company's chief financial officer, Kriengchai Boonpoapichart, said that the company and its subsidiaries achieved total revenue of Bt143.326 billion in the second quarter of this year, a 10.6 per cent increase over the same period last year, mainly driven by higher sales revenue and service income from the convenience store business and the cash and carry business under the “Siam Makro” brand. 
CP All and its subsidiaries’ distribution costs and administrative expenses in the second quarter this year were Bt28.849 billion, up 17.2 per cent from the same quarter of last year. Distribution costs in the quarter were Bt23.870 billion, up 14.9 per cent year on year mainly related to domestic store expansion, as well as expenses that rose relative to higher sales revenue such as advertising and sales promotion expenses, store management fees of the convenience store business and utilities expenses. 
Meanwhile, administrative expenses rose to Bt4.979 billion, up 29.9 per cent year on year. In the quarter, the company and its subsidiaries amended their retirement plan in compliance with the change of the Labour Protection Act in the second quarter of 2019. As a result of this change, the provision for retirement benefits as of June 30 as well as past service costs were recognised additionally, amounting to Bt809 million in the consolidated financial statement.

Kriengchai said that in the second quarter of this year, profit before interest and tax expenses of the company and its subsidiaries were Bt7.296 billion, down 3.9 per cent year on year. Net profit was Bt4.795 billion in the second quarter, up only 0.3 per cent year on year mainly due to higher provision for retirement benefits. However, profit from the normal business operation of the group was growing considerably along with lower finance costs compared to the same period of last year. Earnings per share reported in the consolidated financial statements in the second quarter this year was Bt0.51.
For the first half of 2019, the company and its subsidiaries’ total revenue amounted to Bt282.134 billion, up 9.6 per cent year on year, mainly driven by higher sales revenue and services income. Net profit was Bt10.564 billion, up 3.6 per cent year on year. Earnings per share reported in the consolidated financial statements were Bt1.12 in the first half of this year.
In the first half of the year, the convenience store and other businesses accounted for 66 per cent of total revenue and the cash and carry business accounted for 34 per cent. 
In the first half of 2019, the convenience store and other businesses accounted for 81 per cent of profit before tax while the cash and carry business accounted for 19 per cent. In addition, the profit before tax proportion of the cash and carry business rose year on year due to higher growth of operating profit compared to the convenience store business.