Hard Discount Philippines Inc. (HDPI), operator of discount store chain DALI, closed its 2024 fiscal year with a net loss of P1.97 billion, a 4.78 percent increase from the prior year’s P1.88 billion, its income statement for last year showed.
This raised the company’s negative retained earnings to P5.24 billion as of end-2024, compared to P3.26 billion the prior year, a 60.74 percent increase.
DALI’s entry into the Philippine retail setting popularized the concept of a discount store, which primarily sells private-label goods. DALI opened its first store in the country in 2022.
The US Department of Agriculture, early this year, projected that the private label market in the Philippines will reach $896 million this year, comprising seven percent of the total food and beverage grocery sales.
The loss reduced DALI’s shareholder equity to P728.97 million, from P2.71 billion in 2023, HDPI’s balance sheet showed.
But the company is bullish that “profit margins will improve over the next five years” due to cost efficiency measures, enabling the company to “generate sufficient cash flows from its operations to meet its obligations as and when they fall.”
In end-2024, HDPI reported a P607.32 million cash flow from operations, reversing the P534.8 million negative operations cash flow recorded in 2023.
HDPI’s parent company, Singapore-incorporated HDPM Sin Pte. Ltd., infused P2.89 billion in additional capital into the company last year, to help tide over its operation. In 2023, HDPI received P3.41 billion in additional cash as a deposit for future subscriptions.
HDPI’s ultimate mother company is Switzerland-based Dali Discount AG. Other shareholders in HDPI are the Asian Development Bank (ADB), private equity firm Creador, Navegar and Venturi Partners.
Accounting firm Sycip Gorres Velayo and Co. (SGV), in its independent auditor’s report, agreed with HDPI’s assessment about the challenges presented by the capital deficit, as well as the P134.6 million excess in current liabilities in relation to current assets, which it said indicates a material uncertainty “that may cast significant doubt on the company’s ability to continue as a going concern.”
“The company may be unable to realize its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter,” it said.
In 2024, HDPI booked sales of P33.92 billion compared to P22.31 billion the prior year.
Cost of goods sold hit P30.59 billion, up P20.82 billion the prior year.
This led for gross income to hit P3.33 billion compared to P1.49 billion in 2023.
Operating expense grew to P4.81 billion compared to P3.01 billion.
The company also recorded a P430.53 million charge last year — attributed to interest accretion on lease liabilities, foreign exchange losses, interest expense, loss on disposal of assets, and other income, among others — a 47.67 percent increase from P291.54 million the prior year.
Pre-tax loss is at P1.91 billion, a 4.94 percent increase from P1.82 billion in 2023.
HDPI booked a total asset of P20.97 billion in 2024, up 70.35 percent from P12.31 billion in 2023.
Liabilities were at P20.24 billion, up 206.67 percent from P9.6 billion the prior year.
