7-Eleven’s Phl unit earns 28% more

MANILA, Philippines - Philippine Seven Corp. (PSC), the local licensee of the 7-Eleven convenience store chain, said its profits surged by a little over a quarter last year due to the improvement in operating margin and continued store expansion all over the country.

PSC told the local bourse yesterday that the company registered a net income of P873.3 million last year, 28 percent higher than the P682.6-million earnings in 2013.

“The improved financial performance was largely driven by the increase in sales of all corporate and franchise-operated stores, which posted growth of 19.3 percent from P17.2 billion in 2013 to P20.6 billion at the end of last year,” PSC said.

The 7-Eleven licensee ended last year with a total of 1,282 stores nationwide, 273 stores or 27 percent more than the end-2013 count of 1,009 stores.

PSC said it opened 286 new stores and closed down 13 stores last year.

Jose Victor Paterno, PSC president and chief executive officer, said the long-term growth prospects are favorable and the company can sustain its momentum to meet earnings and store expansion goals.

“PSC has taken steps to protect and expand its leadership in light of increased competition, recognizing that rewards for market share are especially strong in the convenience store sector,” Paterno said.

“This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories. The latter may be unprofitable for the first few years due to the high fixed costs of logistics, but we believe will later be rewarded with strong first mover advantages,” he added.

Last year, Paterno said PSC successfully entered Panay, building on its entry into Negros and Cebu the years prior.

“This year we will be entering Mindanao via Davao and Cagayan de Oro,” Paterno said.