Pantaloon net profit down by 68%

Monday, 13 February 2012

Future Group’s largest retail arm, Pantaloon Retail has registered a 68 per cent decline in consolidated net profit for the quarter ended December 31, 2011 owing to high interest costs, weak consumer sentiment and low festive season.

It had a net profit of Rs 4.47 crore in the period, down from Rs 13.96 crores in the year-ago quarter. Revenue increased marginally by 3.68 per cent to Rs 3,174.6 crores from Rs 3,061.85 crores a year earlier. Net profit was dragged down by interest expenses of Rs 244.1 crores, an increase of 63 per cent year-on-year (y-o-y).

“Owing to the weak sentiments, customers across formats seem to have postponed their purchase decisions,” the company said in a report on its website. In January alone, it achieved sales of more than 40 per cent of what it had achieved during the entire December quarter as it ran promotions, the report said.

Meanwhile, with the change in consumer demand in the wake of volatile economic scenario, the Future Group is going ahead with the restructuring process of its businesses. It has also formed a high powered ‘review committee’ with the mandate to consider various options for realignment and divestments. The committee is expected to submit its recommendations within a short time frame and achieve some or all of these objectives within this financial year, company’s investor presentation said. The company has also been working on various initiatives including monetisation of non-core business. Pantaloon has closed down some stores and is re-vamping some of its formats.

Related News