SHANGHAI, March 20 (Reuters) - GOME Electrical Appliances Holding Ltd, backed by private equity firm Bain Capital, posted an 892 million yuan ($143.95 million) profit in 2013, as cost controls, a wider range of products and a push online helped it return to the black from its first yearly loss in 2012.
The results marked a turnaround for GOME, China’s second-largest home appliance retailer behind Suning Appliance Co Ltd, from a 596.6 million yuan loss in 2012. The profit beat market forecasts of 823.1 million yuan according to Thomson Reuters SmartEstimates.
GOME has invested in its online presence and logistics, measures that analysts said should reduce costs and attract shoppers over the next couple of years. This should boost the firm’s stake in China’s electrical appliance retail market, expected to grow to 2 trillion yuan ($323.00 billion) by 2016 from 1.3 trillion yuan in 2012, according to broker Jefferies.
GOME recorded a 244.1 percent rise in fourth-quarter profit to around 310 million yuan from 90 million yuan profit the same period the year before, according to Reuters’ calculations, beating market expectations of 188.0 million yuan profit.
Revenue for 2013 rose 10.4 percent against a year earlier to 56.4 billion yuan, while its consolidated gross profit margin widened to 18.36 percent from 16.66 percent in 2012.
Rival Suning will announce its earnings later this month.
GOME’s shares rose 3.4 on Thursday, and are down 20.28 percent so far this year, lagging a 8.18 percent drop in the benchmark Hong Kong index.
($1 = 6.1965 Chinese Yuan)
Reporting by Adam Jourdan in SHANGHAI and Donny Kwok in HONG KONG; Editing by Matt Driskill