Home improvement and finishing construction supplies retailer Wilcon Depot Inc. registered a 49 percent surge in net income to P1.86 billion in the first half of 2022.
In a disclosure to the Philippine Stock Exchange, the firm attributed the strong growth to higher net sales and gross profit margin partly offset by increased operating expenses.
“We built on our strong first quarter start and delivered our best quarter net sales and earnings so far, this second quarter,” said Wilcon President and CEO Lorraine Belo-Cincochan.
She added that, “We maintained our strategic focus and remained committed to deliver the widest array of home improvement and finishing construction products and consistent excellent customer service despite the continued operating and supply chain challenges.”
For the second quarter, net income reached P1.02 billion, up 56.4 percent year-on-year due to to higher volume of business and to the gross profit margin expansion. There were less pandemic-related disruptions during the quarter versus the same period last year.
Net sales for the first half totaled P15.94 billion, up 18.7 percent year-on-year, due mainly to the growth in comparable sales of 11.8 percent and the contribution of new stores. Three new depots were opened during the half, all in Luzon.
Sales from depot format stores accounted for 97.5 percent of the total at P15.54 billion and hence driving company-wide results. Home Essentials format stores accounted for 1.8 percent and project sales the remaining 0.7 percent.
As the expansion plan is presently focused on the depot format, the percentage share to total net sales of the Home Essentials’ sales and of Project sales are not expected to substantially grow in the short to medium term.
Gross profit grew by 25.3 percent to P6.16 billion for the half traced mainly to the increased contribution of higher margin products and the expansion of the gross profit margin rates of both the exclusives including in-house brands and the non-exclusive brands.
In-house and exclusive brands’ contribution increased from 49.3 percent to 51.1 percent for the semester.
Operating expenses including lease-related interest expense totaled P3.85 billion for the half, up 13.7 percent year-on-year, due mainly to expansion-related expenses, higher volume of business and inflation.
Rent and net other income totaled P161 million, up 21.9 percent year-on-year, due to increased collection and higher volume of business.
Non-operating interest income and forex gain dropped to P6 million from P18 million due primarily to lower investible funds. Capital expenditure for the half amounted to P1.35 billion.
“We are on track to meet our expansion target of eight new depots for the year. This July, we opened one depot in Ilocos Sur and one Home Essentials in Tagaytay. We will be opening four more depots this second half,” said Belo-Cincochan.
She noted that, “With the improving performance of stores in areas that were more frequently disrupted by mobility restrictions last year, we expect our net sales to grow by at least high teens and our comparable sales by high-single digit to low teens for the full year 2022.”