Philippine Seven Corporation (PSC), the local licensee of 7-Eleven Convenience Stores, registered a 15.4 percent growth in net income in 2015 enabling it to surpass the 1.0 billion peso-mark.
The improved financial performance was largely driven by the increase in sales of all corporate and franchise-operated stores, which grew by 25.3% to P25.8 billion from P20.6 billion in 2014.
PSC ended 2015 with a total of 1,602 stores all over the country, up by 25.0% compared with same period in the preceding year.
The Company achieved another milestone by entering Mindanao. It opened stores in Davao City and Cagayan de Oro during the second quarter.
At the end of 2015, there were 1,391 7-Eleven stores in Luzon, 178 in Visayas and 33 in Mindanao. Here are highlights of 7-Eleven’s 2015 performance:
- Store count at the end 2015 rose to 1,602 stores from 1,282 stores in 2014. New stores added totaled to 337 against 17 closures during the year.
- Net income at the end of 2015 grew by 15.4% to P1.01 billion from P873.3 million in 2014. For the fourth quarter alone, net income increased by 21.6% to P492.5 million from P405.0
million during same period in 2014.
- Retail sales of all stores went up by 25.3% to P25.8 billion from P20.6 billion compared with the preceding year.
- Rate of earnings growth was slower and can be attributed to the Company’s capacity building expenditures. PSC has been expanding its logistics infrastructure to support its
unprecedented expansion in Visayas and Mindanao.
- This will impact profitability in the medium term, in the form of underutilized warehouses, but is expected to benefit the Company by achieving dominant position in new markets.
“We are virtually the only competitor with the critical mass to build out proper supply chains in areas logistically unreachable from GMA. Such supply chains come at a medium term cost in terms of underutilized warehouses. We expanded our existing distribution centers and opened new warehouses in 2015. We ended the year with nine warehouse facilities, (throughout Luzon, Mindanao, and 3 islands in the Visayas), vs four in mid 2014,” said Jose Victor Paterno, President and CEO.
For this year, the Company will be increasing its capital expenditures budget to P3.5 billion to support its accelerated store expansion strategy. Bulk of the said amount is allocated to new store
opening, store renovation and equipment acquisition.
Philippine Seven Corporation (PSE:SEVN) operates the largest convenience store network in the country. It acquired from Southland Corporation (now Seven Eleven Inc.) of Dallas, Texas the
license to operate 7-Eleven stores in the Philippines in December 1982. It was listed in the Philippine Stock Exchange on February 4, 1998. – BusinessNewsAsia.com