Big C posts 33 per cent rise in Q3 net earnings
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Store sales at similar levels to last year as rental, service income up 10%
Big C Supercenter’s net earnings in the third quarter grew by 33 per cent to Bt1.37 billion compared with Bt1.03 billion in the same quarter, mainly on sales growth from new stores.
In the first nine months, Big C earned net profit of Bt4.34 billion against Bt4.19 billion in the same period of 2012.
Rumpa Kumhomreun, chief financial officer and vice president for accounting and finance, noted in a report to the Stock Exchange of Thailand that despite the country’s uncertain economic situation, Big C was able to maintain same-store sales at similar levels to last year.
Net retail sales in the third quarter amounted to Bt28.91 billion or 5.7 per cent over the same period last year. Retail sales growth in the quarter was driven by the full operation of new stores opened during the past 12 months, even though three outlets were undergoing renovations and despite the indirect impact from heavy rain and flooding in some areas.
Rental and service income from tenants amounted to Bt2.19 billion in the quarter, an increase of 10.2 per cent over the same period last year thanks to the new shopping malls.
The occupancy rate remained high and there was continued store expansion in all formats, especially rapid expansion of Mini Big C stores.
Gross profit in the third quarter was Bt3.81 billion, an increase of 2.7 per cent year on year, resulting from the increase in sales.
Financing costs decreased by 25 per cent thanks to a lower debt level due to refinancing.
“Our retail-sales growth of 5.7 per cent year on year combined with 10.2-per-cent growth in rental and service income led to a strong net-income growth of 33 per cent,” said Kudatara Nagaviroj, director of corporate affairs.
An analyst at Asia Plus Securities said in a research note that Big C’s sales revenue of Bt28.9 billion in the third quarter was the lowest in four quarters, mainly because of the overall slowdown in consumption.
Same-store sales in the quarter witnessed flat growth year on year, the lowest level in eight quarters.
Big C reported its sales and administration expenses in the third quarter increased by 12 per cent over the same period last year.
Analysts at Maybank Kim Eng Securities (Thailand) noted that the flat same-store sales growth was due mainly to the overall slowdown in consumption, an indicator of the possibility to lowering estimates for Big C’s net earnings this year.
The serious competition in the retail sector will force retailers to undertake aggressive promotions, which will put pressure on profitability, they said.
