KUALA LUMPUR (Feb 29): 7-Eleven Malaysia Holdings Bhd has registered a record-high net profit of RM221.08 million for the fourth quarter ended Dec 31, 2023 (4QFY2023), compared with RM2.65 million a year ago.
The quarterly earnings were mainly boosted by the divestment gain derived from the stake sale in 75%-owned subsidiary Caring Pharmacy Group Bhd.
However, the convenience store chain posted an operating loss of RM28.11 million in 4QFY2023 amid a 58% sharp rise in administrative expenses to RM98.5 million against RM62.33 million in the previous corresponding quarter, as a result of longer operating hours, new store expansions and workforce expansion.
Quarterly revenue increased by 5.5% to RM694.5 million from RM658 million a year earlier.
According to its bourse filing, the group’s convenience store segment saw its core profit increase year-on-year by 89.2% to RM13.49 million, thanks to buoyant consumer spending and trading activities.
As for its pharmaceutical segment, core profit shrunk by 77.3% to RM2.95 million due to lower off-take of higher margin Covid-19 test kits and face masks.
Commenting on the disposal of the segment, 7-Eleven Malaysia viewed it as an opportunity to unlock and realise the value of its investment.
“Cash proceeds from the disposal will be reinvested into strategic initiatives, including our convenience store segment, which is expected to contribute positively to the group’s future income,” it said.
The group sold its 75% stake in Caring Pharmacy to BIG Pharmacy Holdings Bhd at RM675 million.
Looking ahead, the group said it will take appropriate measures to mitigate impacts from potential headwinds.
“Notwithstanding the continued positive turnaround in trading conditions and retail sentiment, the group is cognisant and will remain steadfast in monitoring potential headwinds arising from global supply chain disruptions, workforce supply constraints and cost pressures on the back of an increase in minimum wages, rising interest rates and inflation,” it added.
Furthermore, the group announced that its new commissary, which could accommodate up to 1,000 stores in the Klang Valley, has become fully operational. Meanwhile, it also planned to introduce the My7E online store, which would offer on-demand delivery to its customers.
For the full financial year ended Dec 31, 2023 (FY2023), the group’s net profit soared to RM276.23 million from RM66.88 million a year earlier, while its revenue increased by 12% to RM2.78 billion from RM2.48 billion a year earlier.
At Thursday’s market close, its share price was unchanged at RM2, valuing the group at RM2.22 billion.