Retailer Philippine Seven Corp. (PSC), the local licensee of 7-Eleven convenience stores, breached the P1-billion net profit milestone in 2015 as the company boosted retail sales while it rolled out more stores nationwide.
PSC registered a 15.4-percent growth in net income last year to P1.01 billion, the company reported to the Philippine Stock Exchange on Friday.
For the fourth quarter alone, PSC’s net profit rose by 21.6 percent year-on-year to P492.5 million. This was on the back of a 35.5-percent year-on-year expansion in revenues from merchandise sales to P6.69 billion.
PSC’s store count at the end 2015 rose to 1,602 from 1,282 stores in the previous year. There were 337 new stores added against 17 closures during the year.
At the end of 2015, there were 1,391
7-Eleven stores in Luzon, 178 in Visayas and 33 in Mindanao.
Retail sales of all stores for the full year went up by 25.3 percent to P25.8 billion. Net margin eased to 4.5 percent from 5.1 percent in the previous year.
PSC achieved another milestone by entering Mindanao. It opened stores in Davao City and Cagayan de Oro during the second quarter.
The slower rate of earnings growth was attributed to the company’s capacity building expenditures. PSC has been expanding its logistics infrastructure to support its unprecedented expansion in Visayas and Mindanao.
Jose Victor Paterno, president and CEO of PSC, said: “the rest of the country is relatively uncontested in comparison. We are virtually the only competitor with the critical mass to build out proper supply chains in areas logistically unreachable from GMA (Greater Metro Manila area). Such supply chains come at a medium term cost in terms of underutilized warehouses.”
PSC expanded its existing distribution centers and opened new warehouses in 2015, ending the year with nine warehouse facilities compared to only four as of mid-2014.
For this year, PSC has increased its capital expenditures budget to P3.5 billion to support its accelerated store expansion strategy. Doris Dumlao-Abadilla