7-Eleven 3Q net profit surges over 12-fold q-o-q on better sales during RMCO

7-Eleven 3Q net profit surges over 12-fold q-o-q on better sales during RMCO
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KUALA LUMPUR (Nov 26): 7-Eleven Malaysia Holdings Bhd saw its net profit for the third quarter ended Sept 30, 2020 (3QFY20) surged more than 12-fold to RM12.92 million or 1.13 sen per share from RM1.03 million or 0.09 sen per share in the immediate preceding quarter as sales improved during the recovery movement control order (RMCO) period.

Quarterly revenue grew by almost 4.22% to RM677.12 million from RM649.73 million in 2QFY20, the group’s bourse filing showed.

The operator of the 7-Eleven chain of convenience stores and Caring Pharmacy said its profit before tax for 3QFY20 quadrupled to RM24.37 million from RM6.21 million in the immediate preceding quarter thanks to better sales in the pharmaceutical segment and improved gross profit margins.

However, on a yearly basis, the group’s net profit fell 23.91% from RM16.98 million a year ago, while its revenue rose 13.96% from RM594.16 million.

The group said its performance in the current quarter was affected by the Covid-19 pandemic.

“Our operations and stores operating hours are restricted during the Conditional Movement Control Order (CMCO) which was in effect from May 4, 2020. Subsequently on June 7, 2020, the Malaysian government announced the Recovery Movement Control Order (RMCO) which eased restrictions and allowed interstate travels,” it said.

For the nine months ended Sept 30, 2020, the group’s net profit decreased by 40.72% to RM25.32 million, from RM42.71 million a year earlier. Its revenue, however, climbed 10.16% to RM1.95 billion, from RM1.77 billion.

In view of the current trading condition under CMCO in major states, the group is taking a cautious view over the outlook for the last quarter of 2020 due to the persevering effects of Covid-19 and the measures necessary to control the pandemic.

“Nevertheless, the group will continue to explore opportunities for growth in other channels and innovate in our product offerings,

“We will also continue to focus on our customers' needs, pursuing our core strategy pillars of Operational Excellence, Cost Management and Commercial Innovation, at the same time refreshing the 7-Eleven and Caring brand in the mind of customers through refreshed stores, innovations in our pricing, promotions, and developing exciting products,” it said.

At the time of writing, 7-Eleven was unchanged at RM1.31, valuing the group at RM1.48 billion.

Lam Jian Wyn