This article first appeared in The Edge Financial Daily on February 27, 2019

KUALA LUMPUR: 7-Eleven Malaysia Holdings Bhd’s net profit fell 21.26% to RM12.49 million in the fourth quarter ended Dec 31, 2018 (4QFY18) from RM15.86 million a year ago, despite stronger revenue, as a lower operating income weighed on its performance.

The 24-hour convenience store operator registered its 4QFY18 other operating income of RM1.84 million, down 81.89% from RM10.14 million last year, primarily because it recorded a compensation income from vendors of RM7.5 million in the previous year.

7-Eleven also noted its selling and distribution expenses for the quarter increased 6.2% to RM164.71 million against RM155.09 million, mainly due to new store expansion, resulting in higher rental and staff-related costs.

Revenue grew 1.47% to RM554.26 million from RM546.24 million, driven by growth in new stores, a higher average spend per customer and a better consumer promotion activity, according to its filing with Bursa Malaysia yesterday.

For FY18, its net profit rose 2.39% to RM51.31 million from RM50.11 million in FY17. Revenue improved 1.33% to RM2.22 billion from RM2.19 billion.

7-Eleven said its board of directors is expecting trading conditions in the next quarter to improve, driven by domestic demand and an anticipated heightened consumer sentiment.