FRIDAY, March 29, 2024
nationthailand

Big C Supercenter

Big C Supercenter

2Q15: Slight beat on better EBIT Neutral

Big C Supercenter Plc (BIGC)
 
2Q15 net profit was Bt2bn (Bt2.4/sh), +5% YoY and +37% QoQ. A better EBIT and lower interest expenses than anticipated led profit 5% above our estimate and 9% above consensus. The slight YoY rise was from a better EBIT margin and lower interest expenses that made up for the fall in sales. The jump QoQ was seasonal from Songkran and back to school events. Its 1H15 profit accounted for 43% of our full-year estimates (vs. 44% over the past five years), and we maintain our forecast. With a less interesting growth outlook than peers, we stay NEUTRAL on the counter. 
2Q15 highlights:  
Revenue was Bt31bn, -2% YoY, as store expansion was too low to counteract the negative same-store sales (SSS) growth. SSS contracted 1.8% YoY (vs -2.0% in 2Q14 and -0.2% in 1Q15) due to last year’s high base from the non-food segment (30% to sales) during football’s World Cup, with positive SSS from the food segment. In 2Q15, BIGC added 1 hypermarket, 3 Big C Markets, 14 Mini Big Cs and 4 Pure Drugstores, raising store numbers to 124 large stores (Big C Supercenter, Extra, and Jumbo), 40 Big C Markets, 342 Mini Big Cs, and 159 Pure Drugstores. 
EBIT margin was 8.5%, +22bps YoY, on better rental income (+5% YoY) from store expansion and better space management, better supply chain management thanks to new distribution centers (DC) – a new Mini Big C DC in 2Q14, a new cross-dock distribution center in 3Q14 and new fresh food DC in 2Q15 - and cost savings, that offset higher marketing required in the face of more intense competition.   
Interest expenses dropped to Bt167mn, -24% YoY, mainly from debt repayment but also partly from a lower interest rate. By business segment, in 2Q15, large store format contributed 90% of revenue (vs. 96% in 2Q14) and 96% of its profit (vs. 99% in 2Q14). 
 
 
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