Philippine Seven Corporation Posts Strong Recovery in 2022
July 21, 2023
The company reaches the highest net income registered in corporate history.
Philippine Seven Corporation (PSC), the leading convenience store operator in the Philippines, held its highly anticipated Annual Stockholders Meeting to report its outstanding financial performance for the year 2022. With record-breaking figures and an ambitious market development plan, PSC continues to strengthen its position in the retail industry.
PSC achieved a remarkable milestone by registering a net income of P2.06 billion, the highest in its corporate history. This achievement marks a significant turnaround from the net losses incurred in the previous two years, with P461.0 million in 2021 and P419.7 million in 2020.
System-wide sales, which represents the retail sales and service income of all corporate and franchise-operated 7-Eleven stores, rose by 39.7 percent to almost P66.0 billion. Revenue from contracts with customers increased by 38.8 percent to P62.7 billion, while revenue from merchandise sales went up 41.5 percent to P56.7 billion.
“We are very pleased with our strong financial post-pandemic performance in 2022, we went from the bottom ranks of 7-Eleven Asian licensees in 2020 and 2021 to among the very top in 2022 in terms of per store sales vs 2019,” said Jose Victor Paterno, PSC President and CEO. “Our results reflect the resilience of our business model, the implementation of correct strategies, and the strong support of our customers. We are confident that we will continue to grow and deliver value to our stakeholders in the years ahead.”
Net income in the fourth quarter grew substantially by 503 percent to P741.2 million. For the whole year, net income generated by the Company reached an all-time high of P2.06 billion, reversing the P461.0 million net loss incurred in the prior year and also surpassed the 2019 pre-pandemic level of P1.4 billion.
The Company’s balance sheet remained strong to support its product and market development plans as the economy reopens. Its return on equity reached 25.5 percent, exceeding 2019 level, owing to better profitability and faster asset turnover.
Increase in Store Count
As of the end of 2022, PSC proudly operates 3,393 7-Eleven convenience stores nationwide. Notably, the company expanded its presence in residential clusters outside Metro Manila to cater to the growing trend of remote work arrangements.
The increase in net cash flow during the period was mainly driven by the improvement in operating cash flow. Operating cash flow went up 71.8 percent to P7.4 billion. This can be attributed to improving profitability driven by sales and service income.
At the current store count, about 52 percent are corporate-owned, while 48 percent are franchise operated. Total new stores opened for the year 2022 reached 353 against 33 closures. This was higher compared to the 164 new stores opened and 69 closures in 2021.
According to PSC Chairman of the Board and Independent Director Jose T. Pardo, “the Company was able to refresh the convenience store concept post-pandemic, while remaining true to the time tested goodwill attached to the 7-Eleven brand. This allowed PSC to move one step closer in fulfilling its mission of making daily lives easier by providing modern convenience.”
ATMs reach Visayas, Mindanao
PSC ended the year with a total of 2,322 ATMs activated in Metro Manila and the rest of Luzon including 148 ATMs in Cebu and 82 ATMs in Davao. This translates into 68 percent coverage and is expected to expand further as ATMs will be deployed in the underserved segment of the market.
Paterno expressed that PSC is aiming to add up to 400 new stores in 2023, which is the pre-pandemic market development plan, “We find ourselves in a situation where geographic shifts in demand have fortuitously opened up opportunities to expand in areas beyond the current reach of competition. Our market development plan will be implemented as we recognize the growing customer preference towards innovation, proximity, and convenience.” PSC has allotted Php 3.7 billion in total CAPEX for 2023 to support its continued expansion.
PSC concluded 2022 with a nationwide store count of 3,393, marking a significant increase of 320 or 10.4 percent compared with the ending store count in 2021. As the company scales up, operating leverage enables lower costs of goods and general and administrative expenses, solidifying PSC’s position in the market.