HDPI reports P7.07bn loss, auditor flags viability
Hard Discount Philippines Inc., operator of DALI stores, recorded P7.07 billion in losses by 2025, a 35 percent rise from the previous year. Its auditor raised significant doubts about the Philippine retailer's ability to continue operations.
HDPI's Mounting Losses
Hard Discount Philippines Inc. (HDPI), the operator of DALI stores, incurred P7.07 billion in losses as of 2025. This figure represents a 35 percent increase from the P5.24 billion reported in 2024, according to an audit by SyCip Gorres Velayo & Co. (SGV).
The substantial deficit has led SGV to express material uncertainty regarding HDPI's capacity to continue as a going concern, casting doubt on its long-term financial stability. The auditor noted that HDPI might be unable to realise its assets or discharge its liabilities in the normal course of business.
Financial Strain and Capital Deficit
HDPI's financial challenges include an accumulated capital deficit of P1.03 billion since 2021. The company's liabilities also surpassed its assets by P1.19 billion, primarily due to outstanding debt and lease obligations. Despite these struggles, the firm's parent company, HDPM Sin Pte.
Ltd., provided support, including a P573.8 million loan and a P1.67 billion capital infusion. In 2024, a P4 billion deposit for future stock subscriptions briefly erased HDPI's capital deficit, leading to a positive equity of P728.76 million before 2025 losses reversed this position.
Operational Performance and Model Challenges
Operationally, HDPI saw a 50 percent surge in sales, reaching P51.66 billion in 2025. The company also reduced direct costs by 49 percent to P30.59 billion. However, these savings were offset by a 48 percent increase in operating expenses, which climbed to P7.1 billion.
DALI stores aim to offer hard-discount products by minimising marketing and maintaining lean personnel, passing savings to consumers. Despite this model's initial promise, particularly during the pandemic, the company has also faced intellectual property claims over its product offerings.
HDPI's significant and growing losses raise questions about the long-term viability of the hard-discount retail model in the Philippines. While DALI's approach of offering low-priced goods by cutting overheads initially garnered attention, its sustained financial difficulties suggest challenges in scaling or sustaining profitability within the market.
Investors in the Southeast Asian retail sector will be watching for further financial disclosures from HDPI, particularly any capital restructuring or strategic shifts, to assess the broader outlook for similar retail formats in the region.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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