Wilcon Nets P2.561B, A 76.8% Increase

Wilcon Depot, Inc. (Wilcon/Company) today reported net income of P2.561 billion, up 76.8% or P1.113 billion year-on-year driven mainly by the increase in net sales and the expansion of gross profit margin partly offset by the increase in operating expenses.

Photo Insert: The Company was able to open ten (10) stores for the year, nine (9) depots, and one (1) smaller format, Home Essentials.

“We delivered stronger quarter-on-quarter performance for the fourth quarter, which raised our net income for the year higher than initially expected. As a result of our earnings turnaround in 2021, our board of directors approved on February 23, 2022, the declaration of a P0.21/share dividends comprising of regular dividends of P0.15/share and special dividends of P0.06/share. This represents a 75.0% increase over last year’s dividends of P0.12/share,” Ms. Lorraine Belo-Cincochan, Wilcon’s President and CEO, said.

Ms. 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 P2.161 billion, spent mostly on the construction of new branches and warehouses, the majority of which were financed by internally generated funds.

“We are planning to add a minimum of eight (8) 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,” Ms. Belo-Cincochan said in closing.

Wilcon’s full-year 2021 net sales reached P27.513 billion, up 21.6% or P4.884 billion year-on-year traced mainly to the increase in comparable sales which grew 12.1% 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% 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 ten (10) stores for the year, nine (9) depots and one (1) smaller format, Home Essentials.

The depot format stores accounted for 97.4% of total net sales amounting to P26.792 billion, driving company-wide total sales growth at 22.1% year-on-year and comparable sales growth at 12.3%.

The Home Essentials contributed 1.9% of total net sales amounting to P530 million with a total and comparable sales growth of 3.8% versus the prior year. Project sales comprised the remaining 0.7% of total net sales, growing 7.9% year-on-year.

Gross profit rose 32.0% or P2.494 billion year-on-year to total P10.276 billion driven primarily by the increase in sales volume and the expansion of gross profit margin by 296 basis points to 37.3% for the year.

The gross profit margin rate improvement is traced mainly to changes in the product mix within the exclusive and in-house brands, which resulted in a higher overall margin for the class, partly offset by the drop in their contribution to total net sales to 49.5% for the year.

The rise in the volume of business of existing stores and the addition of ten (10) new branches increased operating expenses including lease-related interest expense, by 16.8% or P1.035 billion year-on-year to amount to P7.202 billion for 2021.

Meanwhile, net other income representing mainly rental income and other income from trade and other suppliers declined by 15.3% or P58 million to close at 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.

Income tax expense for the year totaled P863 million, up 43.6% or P262 million year-on-year in view of the higher taxable income and the one-off revaluation of the deferred tax liability in relation to the reduction of the income tax rate from 30% to 25% partly offset by the reduction in the tax rate.

Capital expenditure for the year totaled P2.161 billion, mainly spent on the construction of new stores and warehouses.

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