Wilcon Depot Inc. reports ₱ billion net income for the nine-month period 2017
Posted November 17, 2017, 9:25 am
Wilcon Depot Inc.’s (PSE:WLCON) nine-month period ended September 30, 2017 net income amounted to P1.1 billion, generated from net sales of P13.0 billion. According to Mr. Mark Belo, Wilcon Depot’s CFO, net sales for the third quarter this year totaling P4.5 billion was 12.2% higher than the same period last year. For the nine-month period, sales increased by 11.1% from the prior year’s P11.7 billion, which includes the 2016 first quarter’s sales under the parent, Wilcon Corp. The retail business was transferred from the parent to Wilcon Depot on April 1, 2016.
Sales from the depot format stores contributed the bulk, accounting for 96.9% or P12.617 billion, while sales generated by the home essentials format stores contributed the remaining 3.1% or P410 million of total sales. Same store sales growth reached 6.3% for the quarter and 5.9% for the nine-month period, still tracking above target.
Mr. Belo added that gross profit margin (GPM) for the nine-month period is at a steady 30.1%. The average GPM for the full year of 2016, including the first quarter operations under the parent, was at 27.4% (26.8% if excluding the 2016 first quarter results). The improvement was attributed largely to the increased contribution of higher margin products to total sales and improved discounts and rebates from suppliers due to higher sales and purchase volume. Our EBIT margin for the nine-month period settled at 11.3% while EBITDA closed at 11.9%, slightly lower than the 11.5% and 12.1% posted in the first half of 2017, respectively. The decrease is mainly due to the expected increase in operating expenses associated with new store openings.
For the last quarter, we are continuing to push for the opening of more stores starting with our Cabanatuan branch, our fourth for the year, which we will open on November 17, 2017. We projected to open eight depots this year but we have been experiencing construction delays due to logistics challenges and uncooperative weather in the areas where we are currently constructing that may push back two or three of our scheduled openings to next year. The delay though is not expected to adversely impact our earnings for this year or contract the planned 29 stores from 2017 to 2021.
Mr. Belo said in closing that management is satisfied with the pace of the store openings despite the delays since this would give time for the newly opened stores to ramp up and gain traction and contribute to the recovery of forthcoming operating expenses associated with new store openings.