7-Eleven franchisor income surges to P130.8 million in first half

By Zinnia B. Dela Peña (The Philippine Star)

MANILA, Philippines - Philippine Seven Corp. (PhilSeven), the local licensee of the 7-Eleven chain of convenience stores, posted a net income of P130.8 million in the first half this year, more than doubled the P52.75 million profit in the same period last year, on higher system-wide sales.

In a financial report submitted to the Philippine Stock Exchange, PhilSeven said revenues grew 31.29 percent to P4.07 billion, largely due to increased spending during the national and local elections, an improving economy, and good weather conditions.

New franchise operators also boosted the store base and resulted into higher franchise revenues of P113.9 million.

In the second quarter, PhilSeven reported a net profit of P80.7 million, more than twice the P29.48 million posted the previous year. System-wide revenue, a measure of sales of all corporate and franchise-operated stores, rose 38 percent to P2.4 billion.

EBITDA (earnings before interest, taxes, depreciation and amortization) grew 65 percent in the second quarter from P111 million to P183 million. Total revenue from merchandise sales amounted to P2 billion, up 35 percent from P1.5 billion.

PhilSeven ended the second quarter with 493 stores, higher by 27 percent compared to the previous level of 389. Some underperforming stores were closed. Out of the total store base, 40 percent are company-run, while the rest are franchise-operated.

From its existing 500 stores, the company is aiming to double its branch network over the next three years. PhilSeven is targeting to open 100 new stores this year and another 130 by 2011. Each store would cost around P5 million.

Last year, the company opened a record 90 new stores with 7-Eleven franchises growing to almost a 60-percent share. Several StarMart convenience outlets located in Caltex gasoline stations were also converted into 7-Eleven stores as part of a deal with Chevron Philippines.