BENGALURU: Locked in a legal tussle with e-commerce giant Amazon over its Rs 24,713 crore sale to Reliance Industries, Future Retail Limited (FRL) on Friday reported a net loss of Rs 692.36 crore for the second quarter of the financial year (Q2FY21). This was an larger loss than the Rs 165.08 crore it recorded for the corresponding period of last year.
The losses were driven primarily by the impact of the Covid-19 pandemic, which still has a disruptive impact on physical brick-and-mortar stores. Future Retail’s revenue from operations plunged by 74 per cent to Rs 1,424.21 crore during Q2FY21 compared to Rs 5,449.06 crore a year ago.
The retail firm had also cut down on its expenses by a sharp 58.8 per cent, including reductions in stock-in-trade purchases, employee benefit costs, finance and rent expenses, as well as depreciation and amortization spends. Expenses stood at Rs 2,182 crore against Rs 5,304 crore last year.
FRL said that the Covid-19 pandemic has had a significant impact on the firm’s business operations and its financial results for the quarter and six months ended September 30, 2020. For the first half (April-September 2020), Future Retail’s consolidated revenue fell by 74 per cent to Rs 2,782.22 crore as against Rs 10,646.17 crore in the corresponding period of last year.
Kishore Biyani’s retail firm, the second largest in India, has seen its debt pile up to Rs 7,241 crore, and is essentially looking for a buyout from Asia’s richest man, Reliance chairman Mukesh Ambani. RIL and Future Group have signed a deal under which RIL will buy Future’s warehousing, logistics and retail arms.
However, RIL and FRL are now fighting Jeff Bezos’s Amazon at the Delhi High Court, as well as the Singapore International Arbitration Centre, with Amazon arguing that the deal was a breach of Future Group’s contract with Amazon, under which the e-tailer had paid Rs 1,400 crore for a 49 per cent stake in Future Coupons.