Fri, Nov 03, 2017 - Page 12 News List

President posts record profit as margin widens

TIMELY DEAL?The 7-Eleven operator’s Starbucks franchise in China, which it is selling to the US parent for a record price, saw its profit growth drop to 10 percent last quarter

By Kuo Chia-erh  /  Staff reporter

President Chain Store Corp (PCSC, 統一超商), which operates the nation’s largest convenience store chain, on Wednesday posted a record profit of NT$3.086 billion (US$102.23 million) for last quarter, which it attributed to the steady growth of its core business.

Apart from Taiwan’s 7-Eleven convenience stores, the company also operates drugstore chain Cosmed (康是美), online bookstore Books.com Co Ltd (博客來), coffee chain President Starbucks Coffee Corp (統一星巴克) and home-delivery service President Transnet Corp (統一速達), as well as overseas businesses including Philippine Seven Corp, in which it owns a majority stake, and 7-Eleven franchises in Shanghai.

DOMESTIC DEMAND

On a consolidated basis, net profit in the July-to-September quarter climbed 9.5 percent from NT$2.82 billion a year earlier, with earnings per share improving to NT$2.97 from NT$2.71, a company filing with the Taiwan Stock Exchange said.

Sales last quarter rose 3.05 percent annually to NT$57.28 billion, from NT$55.58 billion, due to increasing domestic demand for fresh food and iced products, the company said in a statement.

FOREIGN DECLINE

The company did not offer an earnings breakdown for its subsidiaries, only saying that its logistics and online shopping subsidiaries helped improve its overall profitability, referring to President Transnet and Books.com.

However, Credit Suisse Group AG analysts in a client note yesterday said Starbucks Coffee Shanghai Corp (上海統一星巴克咖啡有限公司) profit growth dropped to 10 percent last quarter, while the Philippine 7-Eleven franchise and Cosmed saw profits drop up to 20 percent and 40 percent from the same quarter last year.

President Starbucks is the only major Taiwanese non-core business unit that posted better year-on-year profit growth, at more than 13 percent last quarter, Credit Suisse said.

On July 27, President Chain Store announced it is to sell its majority stake in Starbucks Shanghai to the US chain by early next year, in what is to be Starbucks’ largest single acquisition.

NEW PRODUCTS

From January to September, cumulative revenue reached NT$165.46 billion, a 2.48 percent year-on-year increase from NT$161.46 billion, the company said.

Total profit grew 9.72 percent annually to NT$8.62 billion, from NT$7.85 billion in the same period last year, it said.

A better product portfolio helped push the gross margin up to 33.17 percent in the first three quarters, from 32.8 percent a year earlier, it said.

The company attributed the performance mainly to its launch of a new series of food products featuring authentic Japanese cuisine at 7-Eleven stores, as well as the introduction of a new line of freshly brewed bubble tea to complement its CityCafe coffee product line.

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