7-Eleven earnings jump 54% to P84.3 million in 2008

MANILA, Philippines - Philippine Seven Corp., the local franchise holder of the 7-Eleven chain of convenience stores, reported a 54 percent jump in 2008 earnings to P84.3 million on the back of strong sales, contained costs and improved support from trade suppliers.

Financial statements filed with the Philippine Stock Exchange show that system-wide sales, which represent the overall retail sales to customers of corporate and franchise-operated stores, rose 12 percent to P6.24 billion.

The company’s net profit translated to an earnings per share of 32 centavos from 21 centavos a year earlier.

Phil-Seven registered total revenues of P5.41 billion or an increase of nine percent from the previous level. Cost of merchandise sold rose 11.4 percent to P3.91 billion.

Gross profit stood at P1.5 billion, while gross profit as a percentage of sales declined slightly partly due to the dilution brought about by the increase in the company’s sales to franchised stores accounted for at zero mark-up.

Commission income, on the other hand, dropped three percent due to continued proliferation of competition from over-the-phone reloading.

As of end-December last year, Phil-Seven had a total of 368 stores, 18 percent higher than the 2007 level of 311. Out of the total, 45 percent or 167 stores are company-owned, while 55 percent or 201 stores are franchise-operated.

It also had a manpower complement of 1,048 engaged in store operations and in various support service units.

Despite the growing competition in the C-store (convenience store) business, Phil-Seven continues to dominate the industry.

As of end-December 2008, Phil-Seven’s asset base expanded 20.5 percent to P2.26 billion.

Receivables went up by P72.8 million as a result of the increase in suppliers’ support and collectibles from the franchisees.