Home improvement chain Wilcon Depot, Inc. reported that its net income leapt 77 percent to P2.56 billion in 2021, driven mainly by the increase in net sales and the expansion of gross profit margin.
“We delivered stronger quarter-on-quarter performance for the fourth quarter, which raised our net income for the year higher than initially expected,” Wilcon President and CEO Lorraine Belo-Cincochan said in a disclosure to the Philippine Stock Exchange.
As a result of the firm’s earnings turnaround in 2021, its Board of Directors approved the declaration of a P0.21 per share dividends comprising of regular dividends of P0.15 per share and special dividends of P0.06 per share. This represents a 75.0 percent increase over last year’s dividends of P0.12 per share.
Belo-Cincochan added that the Company has completely deployed its IPO funds in the first quarter of 2021. Capital expenditure for the year amounted to P2.16 billion, spent mostly on the construction of new branches and warehouses, majority of which were financed by internally generated funds.
“We are planning to add a minimum of eight stores in 2022 in line with our target to have 100 branches by the end of 2025. Should the Covid-19 situation continue to improve during the year, we are expecting private construction to normalize and our annual sales growth to stabilize and return to pre-pandemic trend,” She noted.
Wilcon’s full year 2021 net sales reached P27.51 billion, up 21.6 percent year-on-year, traced mainly to the increase in comparable sales which grew 12.1 percent for the year driven largely by the improved sales performance of stores in Luzon which remained operational despite the prolonged surge of Covid-19 cases.
At the outset of the pandemic in March 2020, Luzon, where 76 percent of Wilcon’s branches were located then, was placed under lockdown, requiring all branches in the region to be closed for two months.
The Company was able to open 10 stores for the year, nine depots and one smaller format, Home Essentials. The depot format stores accounted for 97.4 percent of total net sales amounting to P26.79 billion, driving company-wide total sales growth at 22.1 percent year-on-year and comparable sales growth at 12.3 percent.
The Home Essentials contributed 1.9 percent of total net sales amounting to P530 million with a total and comparable sales growth of 3.8 percent versus the prior year. Project sales comprised the remaining 0.7 percent of total net sales, growing 7.9 percent year-on-year.
Meanwhile, net other income representing mainly rental income and other income from trade and other suppliers declined by 15.3 percent to P322 million for the year as the increase in rental income and other trade-related other income was offset by the decline in rent concession from lessors.
There was a one-off rent waiver granted by lessors in 2020 following the temporary closure of stores in Luzon, which was recognized under other income.
Interest income also declined to P29 million as the IPO funds were completely deployed in the first quarter of 2021.