CONVENIENCE store operator Philippine Seven Corp. (PSC) posted a 5.7% decline in its earnings for 2019 due to the recognition of leases from adopting a new accounting standard.
The listed firm behind 7-Eleven stores told the stock exchange yesterday its net income last year stood at P1.44 billion, lower from the P1.53 billion it recorded a year ago.
The adoption of a new accounting standard, which was required of Philippine companies starting last year, pulled PSC’s earnings lower. Without it, PSC’s net income in 2019 would’ve grown 29.8% to P1.99 billion, driven by a record 10.3% growth in 7-Eleven’s same-store sales.
The company’s retail sales grew 22.1% to P56.3 billion due to a 12.3% increase in its store network. PSC opened 349 new 7-Eleven stores in 2019 to reach 2,864 stores across the country by the end of the year.
With the coronavirus disease 2019 (COVID-19) pandemic and all the government’s measures to mitigate it, PSC said it sees “unprecedented drops in customer counts” and huge disruptions in its supply chain.
“We have spent the time since working around such challenges, and adapting our operation… We expect impact on financial results for the second quarter to be very significant, depending on what post-ECQ (enhanced community quarantine) environment is like and how quickly we are able to adapt,” PSC President and Chief Executive Officer Jose Victor P. Paterno said in the statement.
Shares in PSC at the stock exchange dropped 50 centavos or 0.38% to P130 each yesterday. — Denise A. Valdez
