Philippine Seven Posts P419 Million Net Loss in 2020, But Recovery is in Sight
Listed Philippine Seven Corp (PSC), the exclusive license holder of the 7-Eleven chain of convenience stores in the country, reported a net loss of P419.7 million in 2020 as it grappled with the extended lockdown imposed by the government due to the pandemic.
That’s a steep drop of nearly 130 percent compared to a net income of P1.44 billion in 2019. EBITDA (earnings before interest, taxes, depreciation and amortization) for the year was at P4.73 billion, down 30.2 percent from P6.77 billion in 2019.
But there are signs of recovery as the company posted a net income of P165.6 million during the fourth quarter of 2020, reversing the losses incurred during the second and third quarters.
According to its latest financial report to the Philippine Stock Exchange, sales of 7-Eleven stores near offices and schools were the most affected as most people continued to stay at home. Classified as an essential business, the majority of 7-Eleven stores remained open for most of last year, with fewer than seven percent of its store base temporarily closed by the end of the year.
The company also reported that its total store count nationwide increased from 2,864 in 2019 to 2,978 in 2020.
“We are not out of the woods, by any stretch,” said Jose Victor Paterno, PSC president and CEO. “Our financial performance has been abysmal, and when our profit and growth numbers will return depend on not just the pandemic and how the Philippines navigates it’s end, but on how quickly our online and offline pivots take root, if at all.”
Paterno said the company chooses to compare itself against other similar businesses navigating the effects of the pandemic rather than looking at current numbers and growth forecasts.
“In that regard, we take pride and confidence in a proactive pivot executed at speed (helped as it was by pre-work before the pandemic), relative to that of our more optimistic peers,” he said.
The 7-Eleven store network has been in the Philippines since 1982, with the first store opening at the corner of Kamias Road and EDSA in Quezon City in 1984. Today there are 2,261 7-Eleven stores in Luzon (1,010 of which are in Metro Manila), 432 in Visayas and 285 in Mindanao. Franchised-stores accounted for 55 percent of the total, while the remaining 45 percent are corporate-owned.