Kishore Biyani’s troubles are mounting, with Future Retail Ltd’s (FRL) losses widening to ₹692.36 crore for the quarter ended September 30, against a loss of ₹561 crore in the June quarter.
The retailer had reported a profit of ₹165 crore in the second quarter last year.
“The Covid-19 pandemic has had a significant impact on the business operations and the financial results of the company for the quarter and six months ended September 30, 2020,” FRL said.
Biyani had recently said that Future Retail lost nearly ₹7,000 crore in revenue in the first three-four months of the pandemic due to the closing of stores.
Its revenue from operation was flat at ₹1,424.11 crore in Q2 FY21 compared to ₹1,358 crore in Q1, but down 73 per cent from ₹5,449.06 crore in Q2 FY20.
Lenders worried
Future’s decline is worrying its lenders as the ₹25,000-crore bailout deal with Reliance Retail is in a legal wrangle with Amazon.
While Future has applied to regulatory authorities to approve the deal, bankers are awaiting the outcome of the suit filed by Amazon against the deal. Future Retail has told the Delhi High Court that the deal with Reliance is the only way forward to stay afloat.
The company’s total expenses were at ₹2181,85 crore in Q2 FY21 as opposed to ₹5,304.80 crore in the previous-year period, down 58 per cent. Breaking it up further, the company said its employee cost dropped over 59 per cent, whereas its rental costs declined to ₹4 crore from ₹28 crore the previous year period.
“The company has also applied for rent concessions of ₹43.79 crore for the six months ended September 30, 2020 by accounting the unconditional rent concessions of ₹131 .43 crore in ‘Other Income’ in the Statement of Profit and Loss,” it said in a report.