PhilSeven profits rise to 1735 M

Philippine Seven Corporation (PhilSeven or PSC), the local licensee of 7-Eleven Convenience Stores, increased its net income by 13.4 percent to 1735.3 million during the first nine months of 2018 from 1648.3 million in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm attributed the earnings growth to higher sales. Retail sales of all stores (or system-wide sales) totaled to 133.1 billion, up by 21.9 percent compared with 127.18 billion in the same period in 2017.

The improvement in sales was driven by the 8.1 percent increase in same store sales and the higher number of operating stores, which rose by 12.4 percent or by 270 stores to end the period with 2,442 stores all over the Philippines.

“The new TRAIN law which took effect at the start of 2018 favorably affected sales. The lower personal income tax strengthened the purchasing power of the middle class and the excise tax on sugar-sweetened beverages increased selling price but no significant decline in volume occurred,” PSC said.

It noted that, “In our view, this is because excise taxes narrow the relative price difference between premium and mass market products, and we overweight in the former.”

PSC ended the third quarter with a nationwide store count of 2,442 stores. There were 1,898 7-Eleven stores in Luzon (912 of which are in Metro Manila), 345 in Visayas and 199 in Mindanao.

Franchisees control 54 percent of all stores while the remaining 46 percent are corporate-owned.

“Income from store operations remains healthy at 31 percent for both the quarter and year-to-date, due in large part to TRAIN effects on FMCG (fastmoving consumer goods), which comprises 75 percent of sales,” said PSC President Jose Victor Paterno. He added that, “we hope to decrease reliance on such tailwinds to grow this segment more steadily and sustainably in the near term.”