050707: Lower operating cost trims Uniwide Sales's 1Q loss

By Honey Madrilejos-Reyes

Reporter

RETAIL trader Uniwide Sales Warehouse Club Inc. managed to trim down its first quarter loss to P30.46 million from P69.01 million a year earlier. The improvement mainly came from a reduction in its operating expenses from P92.41 million in 2006 to P68.11 million in the same comparable period. “The improvement in operating expenses can be attributed to the rationalization of personnel related cost, decline in occupancy-related cost and the reduction of various office and store expenses,” the company said in a report to the Securities and Exchange Commission (SEC). Consolidated revenues, however, fell 57 percent to P89.27 million versus P209.96 million because of low turnover from its supermarket operations. The company is now in its fifth year of rehabilitation. A review of the group’s operations for the past four years shows the need for a revised operating strategy to recover from its financial problems. “Pressed for lack of fresh capital, it needs to resort to other business strategies for it to recover from the losses it has been continuously incurring,” Uniwide Sales said in its report. Uniwide also added that appraisal of other properties—which may be considered for payment to unsecured creditors—is ongoing. “To satisfy the obligation to…unsecured creditors, the company is considering some measures including the payment of liabilities through dacion of available free assets of the company,” it said. Uniwide has started doing the inventory of available free assets to be used or dacioned to creditors in place of cash payment. Final list of the free assets and the amount of liabilities these assets can cover would be available within this quarter. The warehouse club concept involves offering consumers a wide range of products at low prices in a “no frills” environment. The products sold by Uniwide Sales outlets range from groceries and household goods to electrical appliances and recreational goods. The company is a unit of listed Uniwide Holdings Inc. (UHI). On June 25, 1999, UHI group, together with the other members of the Uniwide Group of Companies, filed a petition with the SEC for the declaration of temporary suspension of all debt payments, which the SEC approved on June 29, 1999. On April 11, 2000, the SEC approved Uniwide’s Amended Rehabilitation Plan and declared Uniwide in a state of Suspension of Payments. On October 12, 2001, Uniwide filed its Second Amendment to the Rehabilitation Plan, which the SEC approved on December 23, 2002.

 

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