HONG KONG, March 27 (Reuters) - GOME Retail Holdings Ltd , one of China’s biggest home appliances retailer, booked its first annual loss in five years on Tuesday, blaming higher debt costs and a drop in the value of some assets.
For 2017, GOME reported a net loss of 450 million yuan ($71.67 million), versus a 325 million yuan profit a year prior.
Interest on bonds payable increased to 597 million yuan in 2017 from 207 million yuan in 2016 as its debt increased, it said.
GOME, which has a market value of $2.4 billion, earlier this month said it expected to report a loss of as much as 500 million yuan.
However, it said profit would represent an improvement over 2016 if excluding non-operating items, such as impairment of goodwill for underperforming businesses and of long-term assets relating to e-commerce.
“Looking forward, GOME will continue to invest in internet technology, merge the offline experiences with online resources, open digital stores in all tiers of the market,” Chairman Zhang Da Zhong said in an earnings statement.
Revenue fell 6.7 percent to 71.58 billion yuan. Comparable stores sales rose 2.33 percent and consolidated gross profit margin rose to 18.26 percent from 16.09 percent a year earlier.
Zhang also said GOME will develop “smart community stores” and unstaffed stores equipped with cutting-edge technology, and develop various virtual stores covering both online and offline channels.
“In the next three years, GOME plans to open 3,000 county stores, to fully cover the top 100 counties and other areas in China,” Zhang said.
Last month, bigger rival Suning.Com Co Ltd said 2017 sales surged 30 percent to 243.2 billion yuan, with profit up nearly 500 percent at 4.21 billion yuan amid rapid growth in revenue and net profit margin both online and offline.
GOME shares closed up 2.3 percent prior to the results statement, compared with a 0.8 percent rise in the benchmark stock price index. ($1 = 6.3306 Chinese yuan renminbi)
Reporting by Donny Kwok; Editing by Christopher Cushing